COMPARATIVE FEDERALISM – A SYSTEMATIC INQUIRY

CHAPTER 2: FEDERAL PRINCIPLES, FEDERAL ORGANIZATION

Federations comprise both an overarching national or
central government and a set of regional or subnational
governments: provinces in Canada, states in the United
States, Länder in Germany, and cantons in Switzerland, for
example.
Federal vs. Unitary Systems:
The UK is a unitary state. Parliament is entirely
“sovereign,” holding supreme and undivided legislative
authority. Local government—of which the GLC was the
largest and most important example—has traditionally been
entrusted with significant administrative and regulatory
responsibilities. However, these powers exist only as long
as, and to the extent that, parliament so decides; they
are delegated powers, powers that in principle can be
withdrawn at any time (although such a withdrawal may be
politically very difficult).
A case in point is the more recent process of devolution
in the UK. Since 1998, Scotland, Wales, and Northern Ireland
have been granted their own governments, including their own
legislatures and executives, with a wide range of powers not
reserved to the UK parliament. Yet the UK parliament remains
sovereign. In the case of Scotland, for instance, the legal
basis of devolved powers is the UK parliament’s Scotland
Act of 1998, and there is merely “a convention that [the
UK] government will not introduce legislation on
devolved areas without the agreement of the Scottish
parliament.”
By contrast, Canada is a federal state. The legislative
division of powers between the national government and
the provincial governments is guaranteed in a
constitutional document. In principle, each level of
government is sovereign in its own legislative sphere. Neither
level of government can unilaterally alter the powers of the
other. In practice, as is the case in most federations, some of
these divided powers are shared or delegated from one level of
government to another. But such arrangements require mutual
consent and cannot be imposed by one level of government. In
a federal system of government, sovereignty is shared
and powers divided between two levels of government,
each of which enjoys a direct relationship with the
people.
In most federations there are three, not just two, levels or tiers
of government. Typically, though, constitutional guarantees
are not extended to the third level. Federalism has been at its
heart a binary relationship between the central government
and the constituent units. Local government is subordinate—
existing and operating on the basis of powers delegated from
the constituent units as in a unitary system. Delegated powers
can be revoked or altered at any time and decisions made on
the basis of delegated powers can be overturned at a higher
level. This is the case in such federations as Canada, Australia,
and Germany, where local government boundaries are
periodically reshuffled and where the actions of local
government are always liable to be overridden by their
provincial, state, or Länder governments.
The US Constitution, however, does not recognize local
government at all, and the states are constituted as
unitary political systems. But since the nineteenth century,
municipalities, counties, and townships in the US have enjoyed
increasing levels of self-governing autonomy under state
constitutions or laws, varying from state to state, and always
liable to change at the discretion of state legislators. In
addition, US federalism harbours a bewildering array of
special-purpose districts, such as school districts, that are also
subject to their respective state governments.
A particularly intriguing case, finally, is India, where even
states can be created, altered, divided or merged by central
parliamentary degree. Moreover, the constitution originally
provided no protection for local government—even for the
traditional and venerated rural or village panchayats, or
councils, that have been “the pivot of administration, the
centre of social life, and above all, a focus of social solidarity”
in rural India.
In 1992, however, both rural and metropolitan local levels of
government were given constitutional recognition by
Amendments 73 and 74. The states are now required to create
and maintain a three-tiered system of municipal government
alongside the village panchayats, according to constitutionally
prescribed government structures: municipal corporations for
large urban areas, municipal councils for smaller urban areas,
and so-called nagar panchayats for “areas in transition from a
rural area to urban area.”
While central or national governments are—and are
meant to be—constrained by the division of powers, state
or provincial governments exercise unrestrained powers
over localities.
Confederal systems:
In those looser, confederal arrangements, member states
remained the locus of sovereignty and retained the bulk
of their powers, assigning a minimum of powers and
responsibilities to their common government. Typically,
such confederal arrangements leave the central government
dependent on the member states for revenue and with little
scope for making domestic policy.
Some confederations were highly successful and impressively
long-lived: the United Provinces of the Netherlands
endured for two centuries, from 1581 to 1795; and the Swiss
Republic functioned effectively for half a millennium, from
1291 to 1803. But not all confederations worked so well. The
first US constitution—the Articles of Confederation and
Perpetual Union (the Articles)— survived less than a decade
from its ratification in 1781 to its replacement in 1789 and was
dysfunctional for much of that time. Individual states
acquiesced to congressional requisitions of soldiers and
money, for instance, only insofar as they judged it to be in their
own material interests to do so, and by 1786 they had all but
ceased supplying Congress with essential funds.
Confederations are more than alliances or leagues in that they
do aim at the creation of some form of common governance.
But they fall short of being federations for a number of
reasons. The most important of these is, as the proponents of
the new, more centralized US Constitution (the “Federalists”)
argued at the time, that confederations receive their authority
only from the member-state governments and not directly from
the people.10 Consequently, they remain dependent on the
states’ goodwill, cannot raise their own revenue, and can act
only on the basis of unanimous agreement among all states.
The American Articles exemplifi ed and exposed these
weaknesses in the construction of the union and thus paved
the way for more durable arrangements. As Forsyth notes,
“Confederations . . . are usually stepping stones to a
federal state.”
In principle, then, federations are distinguished from
confederations by national citizenship, the direct input
of citizens into both levels of government, the right of
both levels of government to make laws, autonomous
sources of revenue for each level of government, and the
replacement of the unanimity rule by some form of more
practicable majority rule. In practice, however, these
distinctions may not always be so clear-cut.
The European Union (EU), for example, has a number of
confederal characteristics, but is more than a confederation
because significant powers have been transferred to a
European level of governance. Moreover, these powers do
not simply regulate the conduct and relationship of the EU
member states; rather, they apply directly to individual citizens
and businesses and can be enforced by the European Court of
Justice. At the same time, the EU is not a fully developed or
conventional federation because the member states still
retain most traditional powers over domestic and foreign
policy and dominate revenue collection. In addition, the
union treaties that establish the scope and dimension of
supranational authority cannot be changed without the
consent of all member states. Thus, the EU has been
called a case of “confederal federalism.”
Centralization and Decentralization:
This fundamental difference between unitary, federal, and
confederal states must be distinguished from centralization
and decentralization. The UK, for example, has traditionally
been a rather decentralized unitary state, leaving the
regulation and administration of many policy areas to local
self-government. Sweden is another example of a
decentralized unitary state. France, on the other hand, has
been the very embodiment of a unitary and centralized state,
keeping administration of the regional departments under
strict national supervision.
In Germany, most legislative powers are concentrated at the
national level and, for this reason, Germany has even been
called a “unitary federal state.” Another of the classic
federations, Australia, has also become Canada is a notably
decentralized federation. Provincial governments have
aggressively resisted any erosion of their constitutional
powers, and they have even been able to extend them in a
number of policy areas. Switzerland has likewise resisted
centralization to an unusual extent.
Formal Federalism and Political Reality:
Almost any federation has “unfederal” elements, but
determining at what point those elements render it “non-
federal” is difficult. K.C. Wheare, one of the great early
scholars of federalism, described the Canadian Constitution as
“quasi-federal” because of some notably unfederal features.
Those features have long been a dead letter, though, and
Canada is today one of the most strongly federal of all
federations. Similarly, the Indian Constitution has some very
unfederal features, but India must be regarded as federal in
important ways. The following two cases of overly centralized
federalism, Austria and Malaysia, illustrate some of the
ambiguities of such analysis.
Austria is a very centralized federation, by a design dating
back to the 1920s. Apart from being in charge of daycare, the
Länder are for the most part confined to the execution and
administration of federal law. All efforts at federal reform and
a re-balancing of powers have been stalled thus far.
Nonetheless, it may be going too far to call Austrian federalism
obsolete.17 The Länder enjoy strong historical identities, and
the execution of federal law establishing principles of
administration rather than detailed directives
(Grundsatzgesetzgebung ) leaves some room for creative
diversity. While the national government controls most sources
of revenue, fiscal distribution and equalization are in the hands
of an intergovernmental commission.
Federalism and Democracy:
Even though overly centralized by design and political
dynamic, Austria is still a democratic federation. By
comparison, centralization in Malaysia is associated with a
lack of democracy. The political reality is a semi-authoritarian
regime skewed in favour of the Malay ethnic majority, which
uses the structures of federalism for central political control.
Of the 13 states, nine are ruled by hereditary sultans.
These elect the head of state, who in turn appoints both
the governors in the other four states and the majority of
Senate members. He does this on the advice of the
federal prime minister, who in turn heads a government
coalition dominated by the largest Malay party. The coalition
has almost always commanded an easy two-thirds majority in
both legislative chambers. Constitutional amendments have
often been pushed through in a matter of hours. One of them
has been to reallocate residual powers from the states to
the nation level.
In order to achieve what its proponents claim it can
achieve—a balanced combination of large-scale
governance for common problems, and particular or
small-scale governance for the things that make life
most worth living—federalism must be grounded in
democracy and the rule of law.
As Stepan has commented, “In a strict sense, only a system
that is a constitutional democracy can provide credible
guarantees and the institutionally embedded mechanisms that
help ensure that the lawmaking prerogatives of the
subunits will be respected.
Individual and Collective Identity:
Modern democratic states are universally constructed on the
principle of liberal individualism—the proposition that
individuals rather than groups or communities are the bearers
of rights and duties and that individual liberty is the primary
objective of policy. Federalism presents a modification to that
principle by also giving status to communities.
Federalism as a broad social philosophy challenges this
position by assuming that forming relationships in a variety of
communities is part of human nature. Belonging to one or
several communities is regarded as part of individual liberty
and identity.
The purpose of politics, then, is to organize and protect
both individual and group liberties. Federalism responds
to these assumptions by constructing political systems in
which a balance is maintained between different forms
of identity: individual, local, regional, national, and,
increasingly, transnational.
Territorial Bias and Historical Logic:
Federalism only recognizes group identities that are
territorial in nature. Historically, this privileging of
territorially based identities is understandable because in the
past, localities and regions were also social communities
where people were at home, formed most of their social
relationships including marriage and kinship, and engaged in
the economic exchange of goods and services. Right from the
start this was problematic, though, because even the most
territorially defi ned communities are unlikely to fit perfectly
into a set of borders.
In the modern world, identities have begun to extend further
beyond, or cut across, such spatial communities. In modern
political discourse, they are usually identified as communities
of class, gender, and ethnicity, but one can easily think of
others, such as environmental groups or the entire range of
special-interest organizations more generally.
Federalism and Pluralism:
Federalism then differs from pluralism in two significant ways.
On the one hand, it is more than pluralism by formally
recognizing group identities as legitimate and autonomous
participants in the political process. On the other hand, it is
less than pluralism by limiting this recognition to spatial
communities only.
One way in which territorial federal states have dealt with this
problem is to universalize social policy in national welfare
programs, leaving to regional self-government only those
issues that are considered regional in nature, such as
education and culture.
Divided Powers:
In the American case, only the powers given to Congress are
listed, with the assumption that all other powers remain the
preserve of the states. Canada chose separate lists for both
levels of government and added a provision that intended, by
contrast, to give residual powers to the central government.
Earlier constitutions—the American and the Canadian—
enumerated only a relatively small number of general powers.
This created problems of interpretation as well as an
unintended concurrency. Later constitutions such as the
German and Indian learned from this by making lists much
more detailed and by adding specifically enumerated lists of
joint or concurrent powers. Typically, in these cases, the courts
have been much less involved in adjudicating power conflicts.
Dividing powers cleanly between different levels of
government has proven next to impossible. As we have already
seen, general welfare and good government clauses have
contributed to a centralizing dynamic in most federal systems.
In the case of concurrency, federal constitutions typically
assign paramountcy to national legislation—with the
“supremacy clause” of the US Constitution being the
pioneering example. Article 31 of the German Constitution
puts it most bluntly: federal law “breaks” Land law.
As this creeping process of centralization is unacceptable to
the member states, the EU introduced the principle of
subsidiarity in its 1993 Maastricht Treaty as an alternative
method of assigning powers. And as most powers in the EU are
concurrent, subsidiarity prescribes a political process of
negotiated and flexible power-sharing within each policy
field and according to specific criteria of democracy (as close
as possible to the people), efficiency (the policy objective
cannot be attained by individual member-state action), and
proportionality (EU action may not go beyond what is
necessary to reach the objective).
CONSTITUTIONAL GUARANTEES:
Because it provides a legal point of reference for the division
of powers as agreed to among the constituent members of a
federation, a codified (“written”) constitution is an essential
part of a federal system.
The particular purpose of constitutions in federal
systems is to spell out as precisely as possible how the
powers are allocated to different levels of government
and the procedures to be followed for this allocation to
be altered.
Principles of Amendment:
Federal constitutions do not guarantee the continued
existence of federalism itself—though they seek to
guarantee that a derogation from federal principles and
even the abandonment of those principles will occur only
on the basis of a broad “federal” consensus.
In most federal systems, this means that a majority or
even super majority of the provinces, states, cantons, or
Länder have to agree to the change—three-quarters of them in
the case of the United States. In other words, constitutional
change can be brought about against the will of one or a few
constituent member units, but it cannot be achieved by simple
majority. In particularly asymmetrical federations such as
Canada, not even that is good enough, and unanimity is
required for sensitive issues pertaining to the preservation of
language and culture. In Switzerland and Australia, double
majority requirements are in place instead. All constitutional
changes have to be decided by the people themselves, in a
referendum requiring not only a majority of the national
population as a whole, but majorities in a majority of the
cantons or states.
The West German Constitution of 1949 (“Basic Law”) is
an interesting example in this respect. It laid down, in Article
79, that the federal nature of the German republic could
not be altered under any circumstances. Federalism in
Germany, in other words, acquired the status of a fundamental
and inalienable political right.
Secession:
Regionalist and separatist movements have sprung up in
many unitary states since the 1960s, and federalism is
routinely suggested or even introduced as a means of
providing political accommodation without breaking up
the country. Belgium is a case in point.
The dynamic in federal systems is different. States or
provinces in question already possess rights of political
autonomy; their governments can promote, fuel, and
channel the separatist agenda. While federalism provides a
“workable alternative to secession, it also helps to make
secession a more realistic alternative to federalism.” The
most obvious case in point is the province of Québec in
Canada.
In Spain, the government of Catalonia went ahead with a
“statehood” referendum in November 2104 despite a clear
Constitutional Court ruling that such an action would be
in violation of Section 2 of the constitution, which
declares that “the Constitution is based on the indissoluble
unity of the Spanish Nation.”
A normative argument can be made that having entered a
federal union voluntarily, a member also should have the right
to withdraw as an act of self-determination. Yet the framers
of federal constitutions have generally fore-closed the
possibility of secession.
There are exceptions. One of those is Ethiopia, whose
constitution outlines elaborate procedures for such an
eventuality. Another is the European Union. Since the 2009
Lisbon Treaty, the Treaty on European Union (TEU)
contains a new Article 50 (1), that explicitly provides for a
unilateral right of secession: “Any Member State may decide to
withdraw from the Union in accordance with its own
constitutional requirements.”
NEGOTIATING COMPROMISE:
Deliberation in federal systems is different. Federalism is
based on the division of powers among several governments. If
these all legislate without regard for the others, the result
would be political chaos more often than not. Ongoing
negotiations among the different governments of a federation
are therefore necessary for policy coordination in practice.
If the governments of a federation represent different group
identities with different sets of preferences, these can only
be harmonized for the sake of a shared national vision or
common policy direction through negotiation, not
through the administering of majority votes on the basis
of rights. Negotiating legislative compromise with the goal of
finding common ground for national unity and cohesion is
therefore part of the federal creed.
Two ways to negotiate: Bicameralism and
intergovernmental relations.
Bicameralism:
While lower houses or fi rst chambers are uniformly
constructed on the basis of representation by population,
upper houses or second chambers are commonly constructed
to give the constituent units some equivalence of
representation regardless of population. However, second
chambers take rather different forms. The main difference is
between senate and council types of representation.
While senates represent subnational populations, councils are
composed of representatives of the subnational governments.
If there are conflicting views, negotiations about some form of
compromise have to take place in order to pass any legislation
at all. These negotiations are typically assigned to joint
committees either struck for the occasion or permanently
established according to statutory regulation.
Not so evident is whether such compromise adequately
reflects the self-governing interests and rights of the
constituent units. Senate-type upper chambers fail in this
regard, as popularly elected senators overwhelmingly serve
party or local constituency interests rather than regional ones.
Councils in turn perform better in this respect because their
members represent the interests of subnational governments,
which are in turn accountable to subnational populations in
their collective entirety.
There is no participation of the national government in
law-making at the subnational level. The reason is easy to
see: according to the rationale of power division in federal
systems, the sub-national units are supposed to pass
legislation on matters that pertain only to themselves, whereas
the national level passes general legislation pertinent to all
parts of the country.
Bicameralism may or may not be practised at the subnational
level of federal systems. Neither the German Länder, nor the
Canadian provinces, nor the Swiss cantons have upper houses;
they are all unicameral. Subnational governments of that
type are usually less restrained by the need for
negotiating compromise than federal governments.
Particularly in light of the responsibilities that municipalities
carry in modern urbanized societies, it would be very much in
line with the idea and principles of federalism to extend
bicameralism to the regional level more fully and in a more
meaningful way. Municipalities and rural districts could find
representation in provincial second chambers, and
neighbourhoods reflecting the ethnic and social mix of urban
society would be represented more formally in city councils.
Intergovernmental relations:
Intergovernmental relations were not designed into
federalism, but instead have grown organically from it.
Communication and meetings at the staff level and among
professional policy experts are the functional basis of this form
of governance. However, when the ongoing intergovernmental
relationships become politicized by more general disputes over
the division of powers, this kind of intergovernmental or
executive federalism becomes problematic. It then moves
beyond policy coordination into the realm of bargaining over
legislative agendas or even constitutional change affecting the
distribution of powers, and it moves from the hands of
policy experts into those of political leadership.
Social Solidarity:
The word federalism itself comes from the Latin foedus, which
means league, treaty, or compact. A social compact is not a
liberal contract: it means partnership, mutual aid, and
protection regardless of which part is stronger or weaker; it
means compassion rather than competition.
Social solidarity in federal systems is solidarity among the
constituent member units, however. As Jürgen Habermas put it
for the European Union, the stability of a federal union
requires a measure of “civic solidarity,” which “cannot develop
if social inequalities between the member states become
permanent structural features.”
The idea that different parts, endowed with different fortunes
and resources, are to enter into a federal “commonwealth”
implies that social sharing is an essential part of the original
federal compact. This is different from the idea of the modern
welfare state: in federalism, social solidarity is extended not to
individuals but to spatial collectivities—regions, provinces,
states, Länder,or cantons. What the social-compact dimension
of federalism guarantees is the collective social and cultural
well-being of the people living in different parts of the country.
The constituent members of a federal system acquire a right to
economic viability and social stability.
The original federalist compromise is between the retention
of regional autonomy and the development of a national
market economy. Larger markets allocate resources and
generate growth more efficiently but also unevenly. The
desire to enter into a federal union, and the continued
support for such a union, depend on a fair distribution of
that union’s benefits for all. Inherent in the federal
principle, therefore, is a basic commitment to a common good,
and economic efficiency.
Fiscal Redistribution and Regional Development:
One is a fiscal equalization scheme whereby revenue is
redistributed to “poorer” subnational governments so that they
can provide equitable public services to their citizens without
having to resort to higher tax rates. In Germany and Canada,
the obligation to such equalization is enshrined in the
constitution. The other way is the provision of public programs
and grants meant to stimulate economic development in
poorer regions. In the European Union, for instance, the so-
called Structural Funds aim at regional economic and social
cohesion. Neither option is without problems. While the fi scal
equalization among governments pays little attention to
income distribution and welfare within the constituent units,
regional development policies may not suffi ce to overcome
structural imbalances between them. Fiscal equalization may
also provoke resentment among “donor” jurisdictions.
THE VIRTUES OF A FEDERAL SYSTEM:
1. The first of these is that by dividing power between
competing levels of government, federalism creates
constitutional checks and balances against the
abuse of that power.

2. According to the second argument, federalism allows for

local or regional self-determination: accommodating
regional diversity and providing local communities
greater scope to advance their own welfare. In
addition, a division of labour between the national and
state governments means that each can focus on its
 particular responsibilities. More locally based
governments can tailor policies to local tastes.
Historically different regions, for example, can have
different cultural policies while still being equal parts of
one large national market. Taken to its full extent, this is
the argument that federalism provides arrangements
necessary for peaceful coexistence in “divided
societies.”

3. The third argument might be summed up in the adage

that “the government closest to the people governs best.”
It is an argument about governmental and democratic
efficacy and emphasizes the superior local knowledge
and more direct accountability of subnational
governments in a federation. Not everything is most
effectively managed from the centre.

4. The fourth argument in favour of federalism holds that by

creating multiple centres of policy-making, federalism
allows for much greater and less costly policy
experimentation and learning. Federalism enables a
people to try experiments in legislation and
administration which could not be safely tried in a large
centralized country. This later came to be called the
laboratory federalism thesis.

5. A fifth argument is about the virtues of competitive

federalism. This may refer to a relatively mild “yardstick
competition,” whereby individuals in one jurisdiction
can compare performance of their government
against other jurisdictions. Multiple jurisdictions
create what Hirschman described as “exit” options for
citizens and businesses. If they are sufficiently
dissatisfied with the policy environment in one
jurisdiction, citizens or businesses can move to
another.

This would provide governments with a “salutary check

on their activities”—a virtue that appeals particularly to
 market liberals. They argue that federalism is “market-
preserving” insofar as “no government has monopoly
control over economic regulation,” and therefore “must
compete for [mobile] capital, labour, and economic
activity by offering [different] menus of public policies.”

6. Finally, a sixth argument sees federalism as a fail-safe

mechanism of governance with built-in redundancy: a
mistake made at one level can be corrected at the
other. Federalism rarely succeeds in dividing tasks
cleanly and thus results in a considerable degree of
overlap. It is this overlap that provides the prophylactic
redundancy.
THE VICES OF A FEDERAL SYSTEM:
1. While divided jurisdiction may provide healthy limits on
government power, as Madison suggested, in doing so it
may just as readily obstruct policy-making and
frustrate the will of the majority (Imposition of
Hindi?)
2. Federalism may also permit local majorities to tyrannize
over local minorities. The long history of slavery and
racism in the United States is inextricably linked to
federalism in that country.
3. While subnational governments may indeed be closer to
their citizens, they are also more vulnerable to “capture”
by local interests and prone to diverting criticism on to
external scapegoat (Blame the centre?)
4. In addition, policy-making and administration are
burdened with coordination and duplication problems,
and governments may jealously guard their jurisdictional
prerogatives rather than compromise their powers for the
larger good.
5. Competitive federalism may put governments on notice
to perform; however, it privileges mobile factors of
production—business and the rich—and thus
pressures governments to make their policies
maximally business friendly.
6. And finally, federalism’s built-in redundancy can easily be
seen as potentially wasteful overlap and duplication
coupled with endless coordination problems.
 CHAPTER 3: FEDERAL SYSTEMS
ANALYTIC CRITERIA:
I. Rationale (Cultural/Territorial Basis):
Some federations represent a compromise between
different cultural communities defined by their
language, religion, or, more generally, distinct cultural
identities. These cases of cultural federalism have arisen
out of the desire to build a strong union while
accommodating regional difference. Examples are
Switzerland, Canada, Belgium, and India.
Modern Switzerland is subdivided into seventeen German,
four French, one Italian, and four plurilingual cantons. In
Canada, the dividing line runs between nine predominantly
anglophone provinces and the primarily francophone
province of Québec. The Belgian Constitution recognizes
four linguistic regions: French, Dutch, German, and the
bilingual capital region of Brussels. In order to
accommodate India’s enormous linguistic diversity, the
original 14 states created on a territorial basis according to
past administrative structures have been reorganized into
28 states for the most part following linguistic boundaries.
Comprising 28 nation-states with 24 official languages, the
European Union, meanwhile, represents a case of cultural
federalism par excellence. However, with Union governance
limited to agreed-upon objectives under the Treaties,
cultural accommodation is not a salient issue and the style
of intergovernmental relations is generally more
cooperative. The rationale of cultural federalism is the
accommodation of difference.
While most federations were based initially on a
compromise between modernizers seeking economic
advantages in a national market economy and traditionalists
adamant about the retention of regional cultural autonomy,
cultural differences have ceased to be the driving force of
compromise in a number of federal systems. Instead, such
 federations have simply retained a territorial division of
government.
These are cases of territorial federalism. In Germany, for
instance, traditional cultural cleavages between the
Protestant north and Catholic south are no longer relevant
political factors. Neither is the once-bitter historical division
between north and south in the United States of America.
To varying degrees, the 16 German Länder and 50
American states are culturally diverse, to be sure, but
this diversity is not a significant factor in how these
federal systems function.
II. Form of Government (Presidential/Parliamentary Form of
Government):
In parliamentary systems, the executive branch is formed in,
and is responsible to, the legislative branch. Thus “fused”
with the legislative branch, the executive also plays a strong
and often dominant role in the legislative process. In
presidential systems, by contrast, the executive branch is
formed separately from, and is not accountable to, the
legislature. Thus separated, the executive branch does not
enjoy a direct role in the legislative process.
The American constitutional framers strongly believed in
the idea of dispersing power among different branches of
government. Constructing a system of checks and balances
at the national level of government, they created a
bicameral Congress with equal powers vested in the House
of Representatives and the Senate, and an executive branch
—the Presidency—that would derive its legitimacy directly
from popular election as well. Together with the vertical
division of powers between the national and state
governments, this separation of powers creates a
combination of multiple horizontal and vertical checks and
balances known as the “compound republic”.
Westminster or British parliamentary government are
characterized by the fusion of executive and legislative
powers. Prime minister and cabinet sit on the front benches
of parliament and are supported by a party majority.
 Typically, the upper house of the legislature is weaker by
virtue of the fact that the government is formed in the lower
house. The fusion of executive and legislative power also
facilitates direct political bargaining between levels of
government at the leadership level. The main examples are
Canada, Australia, Germany, Switzerland, and India.
III. Bicameralism (Senate or Council Representation):
One of the pervasive characteristics of federalism is
bicameral representation at the national level of
government. Typically, there is a lower house or first chamber
representing the population of the entire federation and an
upper house or second chamber defined as representing in
some way the constituent member units—states, provinces,
cantons, or Länder.
There are two very different kinds of second chamber
organization. One is based on the senate principle, whereby
the people of the constituent units rather than their
governments are represented in the upper house.
In senatorial systems of bicameralism, two forms of popular
representation operate in parallel. The members of the lower
house jointly represent the entire population of the federation
on a straightforward majoritarian basis; the members of the
upper house, on the other hand, represent regional
populations. They have a mandate that is as free as the
mandate of lower-house members. In particular, they are not
bound by instructions or any other form of guidance from state
governments. The principles of vertical power division and
divided federalism are maintained.
The underlying rationale of the senate principle is to
complement the democratic principle of individual
equality (one person, one vote, one value) with the
principle of member unit equality. The constituent units of
the federation are to be given equal weight in national law-
making regardless of whether they are large or small.
Consequently, they are represented equally in the second
chamber. By comparison, representation in the lower
house follows the principle of proportionality. The more
populous states have more representatives and thus
more votes than smaller states.
The other method of second-chamber representation is based
on the council principle, which has its roots in the distinctive
German federal tradition. The members of the German
Bundesrat,or Federal Council, sit as delegates of the Länder
executive governments. In accordance with the principle of
integrated federalism, these representatives of the Länder
participate directly in national law-making. In doing so,
however, they represent the people only indirectly. it is
based on a formula of weighted representation. The
larger Länder get more votes than smaller ones.
The rationale is clear: while senate-type upper chambers
are meant to represent the populations of a federation’s
constituent units, councils are meant to represent the
constituent units as collectivities.

IV. Division of Powers: Legislative (Divided) or

Administrative (Integrated):

Given that federalism is first and foremost about creating

multiple levels of government, one of the most important
distinctions between federations will be the approach
they take to dividing powers and responsibilities between
the central government and the governments of the
constituent units. It turns out that there are two basic
alternatives.

One we may call a legislative division of powers, as

first devised in the original American design of
divided federalism. This approach creates distinct
national and subnational policy domains. The
responsibilities of the central government typically
include such overarching national concerns as
monetary policy, trade and commerce, and foreign
and defence policies. The responsibilities of the
subnational governments include such local
 concerns as culture, education, physical
infrastructure, and social policy. Under this system,
each level of government is responsible for policy-making
in its entirety—from policy initiation and formulation to
legislation and on to implementation and administration.
Citizens are therefore confronted with two separate
strands of public administration (or three in instances of
local government jurisdiction). Most federations have
followed this pattern of legislative federalism.

This is the alternative, then, which we may call an

administrative division of powers, using conventional
German terminology. Most legislative powers are
concentrated at the national level, and most
administrative powers have been given to the Länder.
National legislation for the most part is framework
legislation specifying general policy goals. On the basis of
these, Länder legislation is focused on implementation
and administration. They are also responsible for
applying most national laws and delivering most services.
In doing so, they possess considerable discretion with
regard to policy execution. This administrative division
of powers is a central part of Germany’s integrated
federalism.

By directly participating in national framework

legislation, via the Bundesrat, the Länder governments
can insist on formulations and provisions that leave
considerable flexibility for adoption and execution across
the country. One could see this as a cooperative backward
linkage in intergovernmental relations: program
coordination happens before the legislative dice have
been cast. Divided federal systems, by comparison, are
limited to forward linkages in this sense: program
coordination has to be achieved on the basis of already
existing legislation.

CONTEXTUAL VARIABLES:
There are other features that affect the stability and
performance of federalism. A few of these contextual variables
will be discussed briefly in this section: size and population of
a federation, the number of constituent units, and the degree
of demographic and socioeconomic asymmetry.
Size and Population:
Of the world’s eight largest states—Russia, Canada, China, the
United States, Brazil, India, Australia, and Argentina—seven
are formally constituted as federations, and the eighth, China,
is increasingly regarded as showing signs of de facto
federalization. Intuitively, one would assume that
countries of this magnitude cannot be governed, at least
not democratically, without some form of federalism.
Conversely, however, one might argue that for the very same
reasons—size and diversity—federalism is not enough.
Federalism is based on a balance of powers between two levels
of government. Across vast distances and differences of
continental dimensions, even the most perfect set-up of a
constitutional balance of powers may be upset by centrifugal
forces.
While closely following the Canadian model, the cohesion of
Indian federalism at least during the early years in no small
part depended on corrupted and clientelist central party
governance. Now, after the restructuring of Indian states along
cultural-linguistic lines and the rise of strong regional parties,
a more genuinely federalist balance seems to be taking hold.
Number of Units:
The number of constituent units of which federations are
composed currently ranges from 2 (St. Kitts and Nevis) to 50
(the United States). Some of the geographically largest
federations are subdivided into only a few units (six states and
two self-governing territories in Australia), while some of the
smallest federations contain a large number of units (26
cantons in Switzerland). There is no general correlation
between size and number of units. But there may be one
between number of units and stability.
The main argument has been that a large number of
units contributes to the overall stability of a federal
system because it facilitates fluid coalition-building. The
obvious example is the United States. At least since the Civil
War, there have been no deeply entrenched regional
cleavages, nor have the 50 states ever challenged the
central government collectively. They are simply too
many and too diverse for a unified stance against
congressional supremacy. Conversely, from the perspective
of the central government, it is easier to play a game of
divide-and-rule. The patterns of fiscal grant transfers are so
diffuse that a general sentiment of “you win some, you lose
some” prevails.
By the same token, the argument can be made that a
small number of units tends to strengthen those units’
influence upon the overall system. The collective-action
problem is mitigated and they can gang up on the
central government more easily. Consider in this instance
Canada, where the ten provinces have succeeded—against the
original constitutional intent—in wresting considerable
amounts of power from the federal government.
A final and related argument pertains to so-called bi-communal
federations in which the number of the constituent interest
parties is essentially reduced to two. Czechoslovakia has been
the most extreme case of this kind because there were indeed
only two constituent units, the Czech and Slovak Socialist
Republics, inhabited by two different cultural groups who
were, moreover, at different stages of economic development.
Soon after the end of communist rule, the federation broke
up—even though the bi-communal differences were by no
means extreme.
Belgium is a country similarly divided between two cultural
communities. In this case, however, the development led from
a unitary state on the brink of a break-up to the creation of a
troubled bi-communal federation recognizing both
linguistic regions and cultural communities.
Asymmetry: In terms of size, population and economic
resources:
To have the constitutional status of equals assumes some
underlying equalities. Where imbalances are too great,
federations face ongoing challenges. In most cases, the
constituent units in federal systems are very uneven in size
and population. What does constitute a problem is the
concentration of nearly, or more than, half of the population in
one part or even one constituent unit of the federation. The
Western provinces of Canada, for instance, routinely and
understandably complain that federal elections are already
decided before the polling stations in the westernmost
province of British Columbia have even closed.
Equally significant are asymmetries of regional economic
resources. Canada is the most conspicuous case again. Most of
its manufacturing industries are located in central Canada,
while the economies of the western and eastern provinces rely
mainly on the extraction and export of natural resources.
Agreeing upon a national industrial or energy policy
under such circumstances is virtually impossible.
The great difference between northern and southern economic
strength and development has been the main problem of
economic asymmetry in the EU. While market integration
brought some obvious benefits to all member states and
regions, the main beneficiary has been Germany, whose
positive trade balance has at times been larger than the trade
deficits of all other member states combined. The introduction
of a single currency has compounded the problem, as
economic weakness can no longer be offset by currency
devaluations.
COMPARATIVE FEDERALISM – THEORY AND PRACTICE (MICHAEL
BURGESS)
CHAPTER 3: FEDERALISM AND FEDERATION – THE ORIGINS AND
FORMATION OF FEDERAL STATES

The debate about the origins of federations, which is most

closely associated with Riker, was bound up, as we saw in
Chapter 1, with the reassertion of the exclusively political
approach to the striking of a federal bargain that created a
federal constitution.
While historians stressed the ‘unique historical context’ of
each federal bargain, which Riker was happy to acknowledge,
the political scientist in him wanted to identify a set of
factors common to the origins of every federal state.
 The expansion condition: A desire on the part of the
politicians who offer the bargain to expand their
territorial control by peaceful means, usually either
to meet an external military or diplomatic threat or to
prepare for military or diplomatic aggression or
aggrandizement.
 The military condition: A willingness on the part of
politicians who accept the bargain to give up some
independence for the sake of union either because of
some external military-diplomatic threat or opportunity.
Either they desire protection from an external threat or
they desire to participate in the potential aggression of
the federation.
Antony Birch added two more reasons: (1) the desire to
deter internal threats and (2) the willingness to have
them deterred.
Riker was convinced that federalism was neither an economic
nor a sociological phenomenon but essentially a political affair.
He grounded his approach in the assumption that men
in politics behave rationally in making bargains that
involved mutual benefits. This pursuit of self-interest
could be applied to constitution-making, which, after all,
was participation in a rational political bargain.
Consequently, for federations to appear it was necessary that
there should be some significant threat and that this would
be sufficient to compel the participating actors to strike a
bargain or compact that would be mutually beneficial.
Without these two necessary political conditions of ‘a desire
to expand and a willingness of provincial politicians to
accede despite provincial loyalties’, federations could not
come into existence.
Two principal critiques of Riker’s political theory effectively
revealed it as having little or no explanatory value and
certainly undermined his claim that the existence of military
threats served above all to mark the origin of a federal
government as distinct from other forms of union.
SWITZERLAND:
Switzerland became a federation in 1848 but its federal origins
stretch back to 1291 when the three tiny rural Alpine
communities of Uri, Schwyz and Unterwalden entered
into a league of mutual defence – designated an Oath-
Fellowship (Eidgenossenschaft) – to protect themselves
against the encroachments of the house of Habsburg.
Subsequently the old Swiss Confederation grew up gradually
in the late medieval period as a process of aggregation, adding
new communities till the French Revolution swept them away
in 1798. Change followed change and after Napoleon’s
experiment with the Mediation Constitution in 1803 – a
confederation with a strong centre that lasted until 1813 – it
was only in 1815 that the multilingual structure that we
recognise in Switzerland today first began to take shape.
What had been essentially a Germanic unity was finally
broken as a number of French-speaking territorial
communities, together with Ticino, the only Italian-
speaking area, were admitted to full canton status and
re-established Switzerland as a loose confederation of 25
cantons based upon a treaty that guaranteed collective
security by mutual assistance.
After the Sonderbund Civil war, a new constitution in 1848 was
introduced, ratified by a popular vote of both the citizens and
the cantons, it became a federation. At the very core of its
existence has been the ever-present pulse of the cantons and
communes, both rural and urban, that have preserved the
vitality of liberty, self-determination and citizen
participation in local affairs.
An accurate summary of the Swiss federal evolution therefore
would have to include a combination of strong American
influences, a unique admixture of political institutions and an
indigenous political culture rooted in the spirit of
Bundestreue – of reciprocity, mutual trust and
understanding, tolerance, dignity, partnership and
respect for and recognition of minorities – that values
consensus, conciliation, compromise and consent above
crude majoritarian calculation. In short, the notion of
Oath-Fellowship refers to a covenant, a moral basis, to
preserve and promote the politics of difference and
diversity.
In hindsight it is clear that the conceptual shift from
confederation to federation in 1848 was occasioned by what
was in effect a Swiss civil war and to this extent Riker’s
military-diplomatic condition is fulfilled. However, there are
other factors: economic reasons, external pressures,
democracy and social values and the combination of
democracy with the federal idea.
By the mid-nineteenth century, industrialisation had reached
many cantons creating new urban elites with vested interests
in removing the boundaries of cantonal markets that were
obstacles to economic activities. The federal constitution
extended the powers of the centre from security and laid
the foundations for a common economic market so that
Switzerland became an economic unity.
An additional reason for a conceptually decisive shift to
federation was the external environment that finally
persuaded the cantons to reduce their future
vulnerability to foreign pressures by buttressing their
collective security. It was no accident that the 1848
constitution referred to federal responsibilities to guarantee
the independence of the Swiss nation in ‘unity, force and
honour’ as well as to uphold internal security and order.
A third reason for creating the federation must be sought in
the long-term process of democratisation that had been
fomenting in many of the cantons since the French
Revolution of 1789. The spread of democratic ideas
interacted with the venerable Swiss cultural heritage that had
already familiarised Swiss people with individual self-
responsibility and different forms of communalism or
collective decision-making.
Local self-government has been in Switzerland a factor of
prime importance, not only as the basis of the administrative
fabric, but also because the training which the people have
received from practice in it has been a chief cause of their
success in working republican institutions. Nowhere in
Europe has it been so fully left to the hands of the
people. The Swiss themselves lay stress upon it, as a
means of educating the citizens in public work, as
instilling the sense of civic duty, and as enabling
governmental action to be used for the benefit of the
community without either sacrificing local initiative or
making the action of the central authority too strong
and too pervasive.
7 characteristics of Swiss Federation:
1. The federal structure: Legislature is bicameral, executive
and judiciary. the Federal Assembly, including the
National Council (lower house) and the Council of States
(second chamber); the Federal Council (the executive)
based upon the collegial principle; and the Federal Court
elected by the Federal Assembly.
2. National elections every four years to the National
Council based upon the party list version of proportional
representation (PR) and equal elected representation
of the 26 cantons (that set their own electoral rules) in
the Council of States.
 3. Direct democracy: cantonal and local communal
democracy; the use of obligatory and optional referenda
and popular initiatives; referenda for constitutional and
legislative reform.
4. The principle of proportionality: power-sharing in small
communities.
5. The principle of double majorities; citizens participating
in the electoral politics of decision-making in their dual
capacity as cantonal interests and identities and federal
(national) interests and identities.
6. Cantonal autonomy and strong local powers and
competences.
7. Administrative (interlocking) federal practice whereby
the 26 constituent units implement most federal
legislation.
CANADA:
Canada became a federation in 1867 and had the distinction of
being the first country to combine the parliamentary tradition
of responsible government, based upon the Westminster
model, with federal principles.
The British parliamentary tradition is rooted in certain
preconceptions about order and stability that find their
expression in a fusion of executive and legislative powers so
that strong executive authority results from an ability to
maintain a majority among the elected representatives in
parliament. Federal principles, in contrast, have as their
principal goal the territorial dispersion of power that is
concerned with dividing and sharing powers and competences
between different parts of the polity. The former is most
commonly understood to produce unitary, centralised
government resulting from simple majoritarian procedures
while the latter is predicated upon a federal, decentralised
government that can accommodate minorities within changing
multiple or compound majorities.
Most of the standard commentaries about the origins of the
Canadian federation focus upon four main factors: political
stalemate in the province of Canada, the threat from the
United States, economic imperatives and the noble vision of
the ‘national dream’. But the reality, as usual, is more complex.
Negotiations among the Province of Canada, New
Brunswick and Nova Scotia took place at the two colonial
conferences at Charlottetown and Quebec in 1864 that
culminated in December 1866 in a third conference in
London in which the British government and passed
the British North America Act (now called the Constitution
Act, 1867). It united those three colonies into a federal state as
of 1 July 1867.
The main goals of the union were to pave the way for economic
growth, territorial expansion and national defence. However,
many people wanted to keep
existing governments and boundaries. There were various
reasons for this. French Canadians held a strong majority in
Quebec. They did not want to place all powers in the hands of
a central government in which they would be a minority. There
was also a strong sense of identity in Nova Scotia and New
Brunswick. Federalism was therefore a compromise for
many.
In particular the creation of a federal Canada owed more
to ‘a vigorous and confident Upper Canada, which saw it
as the best way of escaping from the political log-jam of
the existing province, and as an acceptable framework
for the prosecution of other projects’. The British role was
therefore not one of pressure and command, but ‘rather
context and support’. In a nutshell, it was the combination
of indigenous political forces and interests in the
province of Canada, together with the support of the
British government, that brought what had been in the air
for decades to a successful conclusion.
A number of external factors encouraged those colonies to
unite, including:
 the possibility that the United States would not renew the
Reciprocity Treaty of 1854, which ensured market
opportunities for the colonies' products; the colonies had
already lost a substantial share of British markets with
 the end of the British Preferential System, which until
1848 had provided tariff protection to the colonies'
products;
 growing insecurity over American expansionism as
well as over diplomatic incidents and border incursions in
connection with the American Civil War;
 Britain's desire to reduce its obligations and
responsibilities towards its colonies.
But it was the political conditions prevailing in one of the
colonies, the Province of Canada, that favoured a federal type
of union.
Features of Canadian Federalism:
A federal style of government is one that has two separate
levels of government: a central government and several
regional governments. For example, Canada has a federal style
of government with a federal government and provincial
governments. Each level of government has specific powers
and responsibilities that only it can use and these are
described in the Constitution. Neither level of government is in
charge of the other. Each government can use their own
powers without interference from other governments.
The federal (central) government has jurisdiction over the
whole country. Each provincial government has jurisdiction
over its population and region. In a true federation, the
smaller states are not sovereign. They cannot legally secede.
Canada’s federal structure includes the national (or, federal)
government, and ten provincial and three territorial
governments
Integrated Federalism: Powers of the Central Government:
 Peace Order and Good Government: The writers of the
Constitution wanted a more centralized government. One of
the ways they did this was to say that the federal
government has the power to make laws for the “Peace,
Order, and good Government of Canada”.[3] Commonly
 referred to as “the POGG power”, this power is broad and
includes three “branches”:
1. The “gap” branch refers to powers not specifically
mentioned in the Constitution, like air traffic.
2. The “emergency power” branch lets the federal
government make laws that it is normally not allowed to
in times of great emergency, like during a war.
3. The “national concern” branch lets the federal
government make laws on matters that are important for
the entire country.
 Regulation of trade and commerce:
 Criminal Law
 immigration policy,
 macroeconomic policy (including taxation),
 foreign policy (including the negotiation of international
treaties), and
 defense
Powers of the Provincial Govt:
1. Property and civil rights
2. Matters of a merely local or private nature
3. Municipalities
4. Non-renewable natural resources
Other Features:
 at least two orders of government;
 division of powers between the orders of government
defined in the constitution;
 division of revenue sources to ensure each order of
government certain areas of autonomy, also set out in the
constitution;
 written constitution that cannot be amended unilaterally.
The federal House of Commons is directly elected by the
citizenry, as opposed to being appointed by provincial
governments.27 The federal Senate is a federally appointed
body.28 Both houses pass bills by simple majority vote.
Moreover, the constitutional conventions that define a
responsible government in a Westminster democracy apply to
the House of Commons, with no account taken of Canada's
status as a multinational state
MALAYSIA:
The modern federation of Malaysia, formerly Malaya, has
origins that can be traced back at least to 1895 when the
Federated Malay States (FMS) – Selangor, Perak, Pahang
and Negeri Sembilan – was formed by the British colonial
administration. This was not a federation in the accepted
sense of the term, but the real significance of the Treaty of
Federation for our purposes ‘lies in the idea of federation
implicit in it: an idea which paved the way for the ultimate
establishment of true Federal Government in Malaya’.60 This
left five other Malay states – Johore, Kedah, Perlis, Kelantan
and Terengganu – under British protection outside the FMS as
the Unfederated Malay States (UMS) until the Japanese
occupation of Malaya during 1942–45.
The British imposition of the Malayan Union in 1946 was the
first time that all eleven Malay states had been brought
together under one administration, but it lacked popular
legitimacy and was fiercely opposed by the United Malays
National Organisation (UMNO). The strength of the
opposition eventually led to its abolition in 1948 and it was
replaced in the same year by a new federal constitution.
The Federation of Malaya Agreement created the
Federation of Malaya with the same states and settlements
but this time it formally recognised the identity of the Malay
states, strengthened the special status of the Malays vis-à-vis
the Chinese, Indian and other non-Malays and introduced a
highly restrictive citizenship law that actively
discriminated against non-Malays. In practical terms, the
new federation had strong unitary features with a highly
centralised federal government that was designed to
foster a sense of national unity. The constitution did not
guarantee the autonomy of the constituent states nor
did it address the issue of states’ rights; its principal
purpose was to accommodate communal pressures that
reflected the heterogeneity of the population and centred upon
issues of citizenship, language, religion, Malay privileges,
education and the position of the local Malay rulers.
With the creation of the new federation in 1948, one feature
characteristic of Malaya is particularly interesting, namely, the
notion of non-territorial federation. Styled a ‘racial
federation’ by some commentators, the chief identifying
diversities of Malaya were not territorially grouped, thus the
Chinese and Malay elements of the population in
particular were present in almost equal proportions in
some states with the Indian community standing, in a
sense, as a balancing force. None of the three largest
communities therefore could make territorial claims for
autonomous homelands. The communal distribution of the
population meant that a federal rather than a unitary state
structure would allow the Malay population in the eastern
Malay states to resist the economic threat of Chinese
competition that had come to dominate the western
states. In a nutshell, the interaction of communal,
territorial and economic diversities produced a unique set
of circumstances that allowed federation to rescue the Malays
from the threat of Chinese economic dominance.
Watts described the Federation of Malaya as ‘a hybrid
somewhere between unitary and federal government’ and he
noted three key factors that served to reinforce the
progressive increase of central authority during its nine-year
existence: first, the communist threat promoted centralised
administration; second, the experience of elected
representation and self-government converted the central
institutions into an instrument of Malay nationalism; and,
finally, the political and governmental hegemony of UMNO
under the leadership of Tunku Abdul Rahman ensured central
influence in state politics.6
When independence for Malaya arrived in 1957 the
opportunity had also arrived to overhaul the federal system
and this was carried out in a way that effectively increased the
legislative authority of the constituent states while
simultaneously reducing substantially their executive
responsibilities. The Independent Constitutional Commission
(known as the Reid Commission after its chairman, Lord Reid),
on which no Malays were represented, was charged to
establish a strong central government giving the constituent
units a measure of autonomy, to safeguard the position of the
Malay rulers, to create a constitutional head of state chosen
from among the Malay rulers, to confirm a common nationality
for the whole of the federation, and to safeguard the special
position of the Malays and the legitimate interests of other
communities.
In the post-war march towards federation, Singapore had been
deliberately omitted from successive schemes of all-Malayan
union largely because the inclusion of its predominantly
Chinese population would have relegated the Malays to a
minority and both its economic interests and political
leadership were sources of concern to the Malays. However,
the intensified threat of a communist takeover there convinced
the Malayan leadership to respond to the overtures of the
Singapore premier, Lee Kuan Yew, to join the federation.
Riker claimed that his military condition had been present
‘owing to the existence of communist guerrillas, supported
from China’, whereas the expansion condition ‘was present
owing to the necessity of reconciling the previously federated
states’. Moreover, the existence of Indonesian hostility and
reluctance on the part of Singapore and the Borneo
states to accept Malayan domination was tantamount to
a set of circumstances that fulfilled ‘both conditions of the
hypothesis’. Indeed, apart from ‘habit and provincial
loyalties’, Riker argued that it was ‘fear of Chinese
domination’ and the ‘even greater fear of Indonesia’ that
demonstrated the applicability of his bargaining
conditions.
Watts claimed that although the 1957 federal constitution
was retained in form, the changes made to it by the Malaysia
Act (1963) were in practice ‘so substantial as to create a new
federal structure’, but the integrity of the new federation did
not survive more than two years as the Singapore Chinese and
the mainland Malays quickly became embroiled in a power
struggle that led ultimately to the expulsion of Singapore from
the federation in 1965.
Features of Malaysian federalism:
Malaysia comprises 13 states and 3 federal territories. Each
state has its own written constitution, legislative assembly, and
executive council, which is responsible to the legislative
assembly and headed by a chief minister. The federal
territories, which include the capital city region of Kuala
Lumpur, the administrative capital of Putrajaya, and the island
of Labuan off the coast of East Malaysia, carry the same status
as states, but they do not have separate legislatures or heads
of state.
Most of the peninsular states are led by hereditary rulers. The
ruler of a state acts on the advice of the state government. The
constitution provides for federal parliamentary elections and
for elections to state legislatures, to be held at least every five
years.
All states in Malaysia are subdivided into districts. In Sarawak
and Sabah, however, these districts are grouped into larger
administrative units called divisions. The village, headed by
a tua kampung (“village leader”), is the smallest unit of
government.
Although Malaysia is a federal state, political scientists have
suggested that its "federalism is highly centralised": Our
federalism gives the federal government not only the most
legislative and executive powers but also the most important
sources of revenue. State governments are excluded from the
revenues of income tax, export, import and excise duties, and
they are also largely restricted from borrowing internationally.
They have to depend on revenue from forests, lands, mines,
petroleum, the entertainment industry, and finally, transfer
payments from the central government.
Centralization in Malaysia is associated with a lack of
democracy. While formally established as a federation
with a bicameral legislature consisting of a House of
Representatives and a Senate, the political reality is a semi-
authoritarian regime skewed in favour of the Malay ethnic
majority, which uses the structures of federalism for central
political control. Of the 13 states, nine are ruled by hereditary
sultans. These elect the head of state, who in turn appoints
both the governors in the other four states and the majority of
Senate members. He does this on the advice of the federal
prime minister, who in turn heads a government coalition
dominated by the largest Malay party. The coalition has
almost always commanded an easy two-thirds majority in
both legislative chambers. 19 Constitutional amendments
have often been pushed through in a matter of hours. One of
them has been to reallocate residual powers from the
states to the nation level. Since 1969, a Sedition Act makes
public discussion of Malay special rights—which include
preferential recruitment of Malays into the public service—and
of the status of Islam as the official religion a crime.
ORIGINS: UNITED STATES:
The antecedents of American federalism trace to colonial days,
when the concept of divided sovereign power began to take
shape. At the beginning of the Revolutionary War, the thirteen
colonies declared themselves to be free and independent
states. During the hostilities and at the War’s end, the newly
formed states recognized that they needed to operate together
to function adequately on the new national stage and to enter
the world stage.
America’s earliest political associations were forged at a local
level. Early colonists found themselves separated from their
sovereign’s authority and protection by a vast ocean and from
their fellow colonists by a vast geographic expanse. As a
consequence, they organized and largely governed their day-
to-day lives independently and locally.
In 1643, the first American effort to create a political
union among the colonies began in Boston. Faced with
the need to defend and maintain security over a large
territory — and with little hope of receiving aid from England
due to the “sad distractions” of the English Civil War — the
New England settlers found themselves “convinced . . . of the
necessity of banding together to resist destruction. . . .”
The need for some degree of centralization among the various
colonies became clear during the Revolutionary War. The
demands of raising the army, putting it under a central
command, supplying it, and raising funds for it exceeded state
and local government capabilities. The revolutionaries
recognized that some confederation was needed, but they
remained deeply suspicious of centralized power.
Articles of Confederation (1781): The central government
under the Articles was relatively feeble. The states delegated
the central government limited powers and even more
limited resources. That government was unable to levy taxes
or regulate commerce and depended on the states for revenue;
there was no executive and no independent judiciary; there
were no standing land or sea forces; and any change to the
Articles required the states’ unanimous vote. Exercising the
limited powers the new government did have, including
making treaties and coining money, often required a majority
or supermajority vote.
The Articles proved unworkable. Disputes among states were
difficult to resolve, and the central government was
underfunded and unable to compel delinquent states to pay
their shares of common expenditures.
After which, the Constitution came into force in 1787 which
established legislative supremacy of the federal government in
matters of common defense, declare war, raise an army and
maintain a navy, regulate naturalization, coin money, regulate
international commerce, and punish piracy and violations of
international law, even regulate commerce.
ORIGINS: INDIA:
The idea of a federal set-up for the whole of India was
suggested explicitly for the first time by the Simon
Commission (1927-29) and then later on by the Butler
Committee (1930).
Hence the federation of India consisting of both the Princely
States and the British India, was proclaimed for the first time
by the Government of India Act, 1935. It proposed division
of powers between the Union and the Provinces. Schedule
VII consists of three lists (i) Federal List consists of 59 items,
e.g., defense, external affairs, currency, railway, etc.; (ii)
Provincial List consists of 54 items, e.g., public peace and
order, jail, local government, public health and education, etc,
and (iii) Concurrent List consists of 36 items, e.g., civil and
criminal procedure, marriage and divorce, newspapers, etc.,
while residuary powers are provided to the Governor-
General.
It proposed a strong Centre with wide discretionary powers to
the Governor-General and the State Governors which greatly
restricted the autonomy of the provinces. However, the federal
scheme of the Act of 1935 could never be implemented owing
to lack of consent of the ruler of the Princely States. It was
also opposed by the major political parties-the Indian National
Congress and the Muslim League. The Second World War in
September, 1939, paralyzed the process of federalism in India.
The Cabinet Mission Plan of May 16, 1946, proposed a
federal Constitution for the whole of India in which the
jurisdiction of the Central Government would be limited to
defence, external affairs and communications and
relatively strong units having considerable degree of
autonomy, with all residuary powers. Thus, under the Cabinet
Mission Plan the members of the Constituent Assembly of
India were elected and began its work. The Constituent
Assembly set up a Union Powers Committee to define the
respective jurisdiction of the Centre and the States in the
proposed federation.
The Constituent Assembly accepted most of the federal
provisions from the Government of Indian Act, 1935. Also,
the Constituent Assembly adopted the federal system in the
Draft Constitution of India on the model of federal system of
Canada.
Several factors contributed to the particular pattern of
federalism that emerged in India after 1947.
1. First, the British colonial pattern of centralization had a
substantial impact on the thinking of the Indian political
leadership, and their immediate colonial experience
tended to influence their decision.
2. Second, issues of States‟ rights were primarily
subordinate to the larger issue of communal rights and
communal status between Hindus and Muslims. The
partition of the country itself seemed to have
demonstrated the inherent dangers of separatism.
3. Third, the Indian provinces carved out by the British were
primarily administrative units rather than linguistic,
cultural, or ethnic units. Therefore, they lacked the
natural basis of identity that emerged later with the
creation of unilingual states.
4. Fourth, the chaos of partition, communal frenzy, the
India-Pakistan war, and the problem of integrating the
princely states into the Indian Union all combined to
create an atmosphere that favored a centralized form of
federalism.
5. Fifth, the goals of economic development and
modernization seemed to require a strong central
authority capable of directing the economy.
6. Sixth, the existence of a highly centralised, dominant,
mass party (Congress) and the absence of strong state
and regional parties supported a centralised formula.
TOPIC: DOCTRINE OF PITH AND SUBSTANCE (CANADA)
CANADA:
 Essential Character/Matter Test:

“Pith and substance” is the first tool that courts use to

determine which level of government has authority over a
certain matter or issue. At its most basic, a pith and
substance analysis asks what the essential character,
or “matter”, of a law is. The goal is to determine what
the most basic purpose and effect of the law is, and
then to determine the appropriate jurisdiction based on
those characteristics.

 Intrinsic and Extrinsic Evidence:

To determine the purpose of a law, courts use both

intrinsic and extrinsic evidence. Intrinsic evidence
consists of what the law itself says. Often the
preamble of a piece of legislation will contain wording
indicating what the law intends to accomplish and this
can be very useful to a court. Extrinsic evidence, on
the other hand, is evidence that is found outside the
piece of legislation. This will often come in the form of
debates over the law that occurred in the legislature or
comments made by the government when the law was
introduced. Extrinsic evidence can often be very valuable
when the government is trying to mask the true
intentions of the legislation as was the case in R v
Morgentaler. In that case, the true aim of a piece of
legislation of the government of Nova Scotia was to stop
abortion clinics from being set up in the province. That
much is clear from the transcripts of the debate in the
legislature. However, the legislation itself was written to
appear to be aimed at regulation of medical services
within hospitals. The Supreme Court saw through the
wording of the legislation and instead looked at those
debates to come to its conclusion as to the true purpose
of the legislation.
  Legal and Practical Effects:

The effects of a law can also be divided into legal and

practical effects. Legal effects are those stated
effects that were planned as part of the law while
practical effects can include effects which may not
have been intended but occurred. Often, a law will be
deemed unconstitutional because the practical effects
cause the law to be outside the constitutional powers of
the jurisdiction that created it even though the legal
effects were jurisdictionally valid. Once a pith and
substance analysis has been accomplished, the Court can
then move on to determining which appropriate head of
power the law fits into. It is at that point that the Court
determines whether the law was validly enacted. The pith
and substance analysis was central to the Supreme
Court’s decision in the References re Greenhouse Gas
Pollution Pricing Act. Conducting a pith and substance
analysis, the majority concluded that the dominant
purpose of the federal Greenhouse Gas Pollution Pricing
Act was “establishing national standards of GHG
price stringency to reduce GHG emissions.”
Ultimately, the majority concluded that the Act could be
validly characterized under the National Concern
branch of the federal Peace, Order and Good
Government power.
Prominent pith and substance cases:
I. R v Morgentaler (1993):
Facts:
The government adopted the Medical Services Act and
the Medical Services Designation Regulation, which
prohibited the performance of abortions outside
hospitals and the denied health insurance coverage for
abortions performed in violation of the prohibition.
Despite these actions, the respondent opened his clinic and
performed 14 abortions. He was charged with 14 counts of
violating the Medical Services Act. (Nova Scotia province)
Held:
Classification of a law for purposes of federalism involves first
identifying the "matter" of the law and then assigning it to
one of the "classes of subjects" in respect of which the
federal and provincial governments have legislative
authority under ss. 91 and 92 of the Constitution Act,
1867.
A law's "matter" is its true character, or pith and
substance. The analysis of pith and substance necessarily
starts with looking at the legislation itself, in order to
determine its legal effect. The court will also look beyond the
four corners of the legislation to inquire into its background,
context and purpose and, in appropriate cases, will
consider evidence of the actual or predicted practical
effect of the legislation in operation. The ultimate
long-term, practical effect of the legislation is not always
relevant, nor will proof of it always be necessary in
establishing the true character of the legislation.
The court is entitled to refer to extrinsic evidence of
various kinds provided it is relevant and not inherently
unreliable. This clearly includes related legislation, and
evidence of the "mischief" at which the legislation is
directed. It also includes legislative history, in the sense of
the events that occurred during drafting and enactment.
Provided that the court remains mindful of the limited
reliability and weight of Hansard (Hansard is a
“substantially verbatim” report of what is said in
Parliament) evidence, it should be admitted as relevant to
both the background and the purpose of legislation. The
excerpts from Hansard were thus properly admitted by the
trial judge in this case. This evidence demonstrates that
members of all parties in the legislature understood the
central feature of the proposed law to be prohibition of
the respondent's proposed clinic on the basis of a
common and almost unanimous opposition to abortion
clinics per se.
The Medical Services Act and Medical Services
Designation Regulation together constitute an
indivisible attempt by the province to legislate in the
area of criminal law. Since they deal with a subject
historically considered to be part of the criminal law --
the prohibition of the performance of abortions with
penal consequences -- they are suspect on their face, and
it is not necessary to invoke the colourability doctrine.
An examination of their terms and legal effect, their history
(Hansard Evidence) and purpose and the circumstances
surrounding their enactment leads to the conclusion that the
legislation's central purpose and dominant
characteristic is the restriction of abortion as a socially
undesirable practice which should be suppressed or
punished. The legislation has an effect on abortions in private
clinics virtually indistinguishable from that of the now defunct
abortion provision of the Criminal Code, and this overlap of
legal effects is capable of supporting an inference that the
legislation was designed to serve a criminal law purpose.
The concerns to which the provincial government submits the
legislation is primarily directed -- privatization, cost and
quality of health care, and a policy of preventing a two-tier
system of access to medical services - were conspicuously
absent throughout most of the legislative proceedings.
The impugned legislation treats of a moral issue. While
legislation which authorizes the establishment and
enforcement of a local standard of morality does not ipso
facto invade the field of criminal law, interdiction of conduct
in the interest of public morals was and remains one of
the classic ends of the criminal law. There is thus a
strong inference that the purpose and true nature of the
legislation relate to a matter within the federal head of
power in respect of criminal law. This inference is
supported by the absence of evidence that privatization and
the cost and quality of health care services were anything
more than incidental concerns and by the relatively severe
penalties provided for in the Act.
II. Reference Re Firearms Act:
Facts:
In 1995, Parliament amended the Criminal Code by enacting
the Firearms Act. The amendments require the holders of
all firearms to obtain licences and register their guns.
Alberta referred constitutional questions to the Court of
Appeal to determine whether the licensing and registration
provisions of the Firearms Act, as they relate to ordinary
firearms, are intra vires Parliament. The majority of the
Court of Appeal concluded that the Act is a valid exercise of
Parliament’s criminal law power. Alberta appealed to this
Court.
Held:
The impugned provisions of the Firearms Act are
constitutional. The Firearms Act constitutes a valid exercise of
Parliament’s jurisdiction over criminal law. The Act in
“pith and substance” is directed to enhancing public
safety by controlling access to firearms. Its purpose is to
deter the misuse of firearms, control those given access
to guns, and control specific types of weapons. It is
aimed at a number of “mischiefs”, including the illegal
trade in guns, both within Canada and across the border
with the United States, and the link between guns and
violent crime, suicide, and accidental deaths.
The purpose of the Firearms Act conforms with the historical
public safety focus of all gun control laws. The changes
introduced by the Act represent a limited expansion of the
pre-existing gun control legislation. The effects of the Act
also suggest that its essence is the promotion of public safety.
The criteria for acquiring a licence are concerned with safety.
Criminal record checks and background investigations
are designed to keep guns out of the hands of those
incapable of using them safely. Safety courses ensure
that gun owners are qualified.
 The Firearms Act possesses all three criteria required for a
criminal law. Gun control has traditionally been considered
valid criminal law because guns are dangerous and (1) pose a
risk to public safety. The regulation of guns as (2)
dangerous products is a valid purpose within the
criminal law power. That purpose is connected to
prohibitions (3) backed by penalties.
The Firearms Act is not essentially regulatory
legislation. The Act’s complexity does not necessarily detract
from its criminal nature. Nor does the law give either the
chief firearms officer or the Registrar undue discretion. The
offences are clearly defined in the Act. The chief firearms
officer and the Registrar are explicitly subject to the
supervision of the courts. Further, the law’s prohibitions
and penalties are not regulatory in nature. They are not
confined to ensuring compliance with a scheme, but
independently serve the purpose of public safety.
Parliament’s intention was not to regulate property, but
to ensure that only those who prove themselves qualified
to hold a licence are permitted to possess firearms of any
sort.
The Firearms Act is distinguishable from existing provincial
property regulation schemes. While ordinary guns are often
used for lawful purposes, they are also used for crime
and suicide, and cause accidental death and injury. Their
control accordingly falls within the criminal law power.
The registration and licensing provisions cannot be severed
from the rest of the Act. Both portions are integral and
necessary to the operation of the scheme.
The Firearms Act does not trench on provincial powers such
that upholding it as criminal law will upset the balance of
federalism. The provinces have not established that the
effects of the Act on provincial jurisdiction over property
and civil rights are more than incidental. First, the mere
fact that guns are property does not suffice to show that a
gun control law is in pith and substance a provincial matter.
Second, the Act does not significantly hinder the ability of
the provinces to regulate the property and civil rights
aspects of guns. Third, assuming (without deciding) that the
provincial legislatures have the jurisdiction to enact a law in
relation to the property aspects of firearms, the double
aspect doctrine permits Parliament to address the safety
aspects of ordinary firearms. Fourth, the Firearms Act does
not precipitate the federal government’s entry into a new field
since gun control has been the subject of federal law since
Confederation. There is no colourable intrusion into provincial
jurisdiction.
III. Canadian Western Bank v Alberta:
Facts:
In 2000, Alberta enacted changes to its Insurance
Act purporting to make federally chartered banks subject
to the provincial licensing scheme governing the
promotion of insurance products. Upon the coming into
force of that Act, the appellant banks brought an application
for a declaration that their promotion of certain insurance
products authorized by the Bank Act was banking within the
meaning of s. 91(15) of the Constitution Act, 1867 and that
the Insurance Act and its associated regulations were
constitutionally inapplicable to the banks’ promotion of
insurance by virtue of the doctrine of interjurisdictional
immunity or, alternatively, inoperative by virtue of the doctrine
of federal paramountcy. The trial judge dismissed the
application. He found that the challenged provisions of
the Insurance Act were valid provincial legislation
related to the province’s property and civil rights power
under s. 92(13) of the Constitution Act, 1867. He also
found that the doctrine of interjurisdictional immunity was
inapplicable because the promotion of authorized insurance
was not at the core of banking, and that the doctrine of federal
paramountcy was inapplicable because there was no
operational conflict between the federal and provincial
legislation. The Court of Appeal upheld the decision.
Judgement:
The resolution of a case involving the constitutionality of
legislation in relation to the division of powers must begin with
an analysis of the pith and substance of the impugned
legislation. Legislation whose pith and substance falls within
the jurisdiction of the legislature that enacted it may, at least
to a certain extent, affect matters beyond the legislature’s
jurisdiction without necessarily being unconstitutional.
At this stage of the analysis, the dominant purpose of the
legislation is still decisive. Merely incidental effects will not
disturb the constitutionality of an otherwise intra vires law.
The pith and substance doctrine is founded on the
recognition that it is in practice impossible for a
legislature to exercise its jurisdiction over a matter
effectively without incidentally affecting matters within
the jurisdiction of another level of government.
In the instant case, the pith and substance of the
Alberta Insurance Act relates to property and civil rights in the
province under s. 92(13) of the Constitution Act, 1867, and is a
valid provincial law. The mere fact that the banks now
participate in the promotion of insurance does not
change the essential nature of the insurance activity,
which remains a matter generally falling within
provincial jurisdiction.
The Insurance Act is clearly a law in pith and substance about
the regulation of the insurance industry within the province,
and the particular provisions at issue are concerned with the
licensing and regulation of insurance providers, promoters and
agents. The provincial law applies to all persons providing or
promoting insurance services, including banks. It is therefore
valid legislation of general application enacted under the
provincial legislative authority over property and civil rights in
the province under s. 92(13) of the Constitution Act, 1867. As
for the validity of the 1991 amendments to the Bank Act, they
were not challenged by the parties. [116-117]
The doctrine of paramountcy does not apply in this case as
there is no conflict between the provincial law and the federal
law. The interaction between the two statutory schemes is one
of harmony and complementarity, rather than frustration of
Parliament’s legislative purpose. The aim of the
amendments to the Bank Act and the associated
regulations was to permit the banks to engage in the
promotion of authorized insurance products and to spell
out the types of products which could be validly
promoted, not to set out the precise manner in which the
promotion of insurance would be governed and
regulated. Conversely, the aim of the provincial legislation
was to provide a regulatory scheme for the promotion of
insurance, but not to exercise any control over the kinds of
insurance that banks may promote, or the extent to which they
may do so, thereby maintaining the integrity of Parliament’s
legislative purpose.
REFERENCES RE GREENHOUSE GAS POLLUTION PRICING ACT
Facts:
In 2018, Parliament enacted the Greenhouse Gas Pollution
Pricing Act (“GGPPA”). The GGPPA comprises four parts and
four schedules.
Part 1 establishes a fuel charge that applies to producers,
distributors and importers of various types of carbon-
based fuel.
Part 2 sets out a pricing mechanism for industrial
greenhouse gas (“GHG”) emissions by large emissions-
intensive industrial facilities.
Saskatchewan, Ontario and Alberta challenged the
constitutionality of the first two parts and the four schedules of
the GGPPA by references to their respective courts of appeal,
asking whether the GGPPA is unconstitutional in whole or in
part.
Held:
The GGPPA is constitutional. It sets minimum national
standards of GHG price stringency to reduce GHG emissions.
Parliament has jurisdiction to enact this law as a matter
of national concern under the peace, order, and good
government (“POGG”) clause of s. 91 of the Constitution
Act, 1867.
Sections 91 and 92 of the Constitution give expression to
the principle of federalism and divide legislative powers
between Parliament and the provincial legislatures.
Under the division of powers, broad powers were conferred on
the provinces to ensure diversity, while at the same time
reserving to the federal government powers better exercised
in relation to the country as a whole to provide for Canada’s
unity.
Pith and Substance Doctrine:
 The review of legislation on
federalism grounds consists of the well-established two-stage
analytical approach.
1. Characterization: At the first stage, a court must
consider the purpose and effects of the challenged statute
or provision with a view to characterizing the subject
matter or “pith and substance”.
2. Classification: A court must then classify the subject
matter with reference to federal and provincial heads of
power under the Constitution in order to determine
whether it is intra vires Parliament and therefore valid.
Where a court is asked to adjudicate the
constitutionality of legislation that has been in force for
only a short time, any prediction of future practical
effect is necessarily short-term, since the court is not
equipped to predict accurately the future consequential
impact of legislation. The characterization process is not
technical or formalistic. A court can look at the background
and circumstances of a statute’s enactment as well as at the
words used in it.
Three points with respect to the identification of the pith and
substance are important to clarify.
1. First, the pith and substance of a challenged statute
or provision must be described as precisely as
possible. A vague or general description is
unhelpful, as it can result in the law being
superficially assigned to both federal and provincial
heads of powers or may exaggerate the extent to
which the law extends into the other level of
government’s sphere of jurisdiction. However,
precision should not be confused with narrowness. A
court must focus on the law itself and what it is really
about. The pith and substance of a challenged statute or
provision should capture the law’s essential character in
terms that are as precise as the law will allow.
 2. Second, it is permissible in some circumstances for
a court to include the legislative choice of means in
the definition of a statute’s pith and substance, as
long as it does not lose sight of the fact that the goal of
the analysis is to identify the true subject matter of
the challenged statute or provision. In some cases, the
choice of means may be so central to the legislative
objective that the main thrust of a statute or
provision, properly understood, is to achieve a result
in a particular way, which would justify including
the means in identifying the pith and substance.

3. Third, the characterization and classification stages

of the division of powers analysis are and must be kept
distinct. The pith and substance of a statute or a
provision must be identified without regard to the
heads of legislative competence.

At the second stage of the division of power

analysis, a court must classify the matter by reference to the
heads of power set out in the Constitution. Matters and
classes of subjects are distinct. Law-making powers are
exercisable in relation to matters, which in turn
generally come within broader classes of subjects.
Peace, Order and Good Governance (National Concern
Doctrine):
Section 91 does not provide in the context of the POGG power
that Parliament can make laws in relation to classes of
subjects; instead, it states that Parliament can make laws for
the peace, order, and good government of Canada in relation
to “Matters”. National concern is a well-established but rarely
applied doctrine of Canadian constitutional law derived from
the introductory clause of s. 91 of the Constitution, which
empowers Parliament to make laws for the peace, order, and
good government of Canada, in relation to all matters not
coming within the classes of subjects assigned exclusively to
the legislatures of the provinces. A matter that falls under
the POGG power necessarily does not come within the
classes of subjects enumerated in ss. 91 and 92.
Courts must approach a finding that the federal
government has jurisdiction on the basis of the national
concern doctrine with great caution. The effect of finding
that a matter is one of national concern is permanent
and confers exclusive jurisdiction over that matter on
Parliament. However, the scope of the federal power is
defined by the nature of the national concern itself and only
aspects with a sufficient connection to the underlying inherent
national concern will fall within the scope of the federal power.
Double Aspect Doctrine:
A closely related question concerns the
applicability of the double aspect doctrine to a matter of
national concern. The double aspect doctrine recognizes
that the same fact situations can be regulated from
different perspectives, one of which may relate to a
provincial power and the other to a federal power.
The doctrine can apply in cases in which the federal
government has jurisdiction on the basis of the national
concern doctrine. The fact that the double aspect
doctrine can apply does not mean that it will apply in a
given case. It may apply if a fact situation can be regulated
from different federal and provincial perspectives and each
level of government has a compelling interest in enacting
legal rules in relation to that situation. It should be applied
cautiously so as to avoid eroding the importance
attached to provincial autonomy.
The double aspect doctrine takes on particular
significance where Canada asserts jurisdiction over a matter
that involves a minimum national standard imposed by
legislation that operates as a backstop. The recognition of a
matter of national concern such as this will inevitably result in
a double aspect situation. This is in fact the very premise of a
federal scheme that imposes minimum national standards:
Canada and the provinces are both free to legislate in relation
to the same fact situation but the federal law is paramount.
Conditions for National Concern Doctrine:
1. Evidence and Burden of Proof on Canada: First, the
recognition of a matter of national concern must be based
on evidence. An onus rests on Canada throughout
the national concern analysis to adduce evidence in
support of its assertion of jurisdiction.

2. Need not be historically new: Second, there is no

requirement that a matter be historically new in
order to be found to be one of national concern.
Many new developments may be predominantly local and
provincial in character and fall under provincial heads of
power. The term “new”, as used in the jurisprudence,
refers to matters that could satisfy the national concern
test and includes both “new” matters that did not
exist in 1867 and matters that are “new” in the
sense that the understanding of those subject
matters has, in some way, shifted so as to bring out
their inherently national character. Thus, the
critical element of the analysis is the requirement
that matters of national concern be inherently
national in character, not that they be historically
new.
Three Step Analysis for National Concern
Doctrine:
1. Threshold: First, as a threshold question, Canada must
establish that the matter is of sufficient concern to the
country as a whole to warrant consideration as a possible
matter of national concern.

2. Indivisibility: Second, the matter must have a singleness,

distinctiveness and indivisibility. Two principles are
followed:

a. To prevent federal overreach, jurisdiction should be

found to exist only over a specific and identifiable
matter that is qualitatively different from
matters of provincial concern;
 b. Federal jurisdiction should be found to exist only
where the evidence establishes provincial inability
to deal with the matter.

Regards the first principle of preventing federal

overreach, the court should inquire into whether the
matter is predominantly extra-provincial and
international in its nature or its effects, into the
content of any international agreements (presence
of which is not determinative) in relation to the
matter, and into whether the matter involves a
federal legislative role that is distinct from and not
duplicative of that of the provinces. The mere growth
or extent of a problem across Canada is insufficient
to justify federal jurisdiction.

Regards the second principle, provincial inability

functions as a strong constraint on federal power and
should be seen as a necessary but not sufficient
requirement for the purposes of the national concern
doctrine. In order for provincial inability to be established
both of these factors are required: (1) the legislation
should be of a nature that the provinces jointly or
severally would be constitutionally incapable of
enacting; (2) the failure to include one or more provinces
or localities in a legislative scheme would jeopardize the
successful operation of the scheme in other parts of
the country and (3) Province’s failure to deal with the
matter must have grave extra-provincial
consequences. The requirement for grave
extraprovincial consequences sets a high bar for a
finding of provincial inability for the purposes of the
national concern doctrine and can be satisfied by actual
harm or by a serious risk of harm being sustained in
the future. It may include serious harm to human life
and health or to the environment, though it is not
necessarily limited to such consequences. Mere
 inefficiency or additional financial costs stemming
from divided or overlapping jurisdiction is clearly
insufficient.

3. Inherent National concern: Third, Canada must show

that the proposed matter has a scale of impact on
provincial jurisdiction that is reconcilable with the
division of powers. The purpose of the national concern
analysis is to identify matters of inherent national
concern — matters which, by their nature, transcend
the provinces. The purpose of the scale of impact analysis
is to protect against unjustified intrusions on
provincial autonomy and prevent federal overreach. At
this stage of the analysis, the intrusion upon provincial
autonomy that would result from empowering Parliament to
act is balanced against the extent of the impact on the
interests that would be affected if Parliament were
unable to constitutionally address the matter at a
national level. Identifying a new matter of national
concern will be justified only if the latter outweighs
the former.
The Case:
In this case, the true subject matter of the GGPPA is
establishing minimum national standards of GHG price
stringency to reduce GHG emissions. Both the short and
long titles of the GGPPA confirm that its true subject matter
is not just to mitigate climate change, but to do so through the
pan-Canadian application of pricing mechanisms to a
broad set of GHG emission sources. Likewise, it is clear
from reading the preamble as a whole that the focus of
the GGPPA is on national GHG pricing.
In Parliament’s eyes, the relevant mischief is the effects of
the failure of some provinces to implement GHG pricing
systems or to implement sufficiently stringent pricing
systems, and the consequential failure to reduce GHG
emissions across Canada. To address this mischief,
the GGPPA establishes minimum national standards of GHG
pricing that apply across Canada, setting a GHG pricing floor
across the country.
Similarly, it can be seen from the events leading up to the
enactment of the GGPPA and from government policy
papers that there was a focus on GHG pricing and
establishing minimum national standards of GHG price
stringency for GHG emissions — through a federally
imposed national direct GHG pricing backstop — without
displacing provincial and territorial jurisdiction over the
choice and design of pricing instruments. This is
supported by evidence of the legislative debates. Both
elected representatives and senior public servants consistently
described the purpose of the GGPPA in terms of imposing
a Canada-wide GHG pricing system, not of regulating
GHG emissions generally.
The legal effects of the GGPPA confirm that its focus is on
national GHG pricing and confirm its essentially
backstop nature. In jurisdictions where Parts 1 and 2 of
the GGPPA apply, the primary legal effect is to create one
GHG pricing scheme that prices GHG emissions in a
manner that is consistent with what is done in the rest of
the Canadian economy.
The GGPPA does not require those to whom it applies to
perform or refrain from performing specified GHG
emitting activities. Nor does it tell industries how they
are to operate in order to reduce their GHG emissions.
Instead, all it does is to require persons to pay for engaging in
specified activities that result in the emission of GHGs.
Moreover, it will apply only if the Governor in Council has
listed a province or territory. As a result, the GHG pricing
mechanism described in Parts 1 and 2 of the GGPPA will not
come into operation at all in a province or territory that
already has a sufficiently stringent GHG pricing system. This
feature gives legal effect to the federal government’s
commitment to give the provinces and territories the
flexibility to design their own policies to meet emissions
reductions targets, including carbon pricing, adapted to
each province and territory’s specific circumstances, as
well as to recognize carbon pricing policies already
implemented or in development by provinces and
territories.
The evidence of practical effects to date is consistent with
providing flexibility and support for provincially designed GHG
pricing schemes. Practically speaking, the only thing not
permitted by the GGPPA is for provinces and territories
not to implement a GHG pricing mechanism or one that
is not sufficiently stringent.
Applying the threshold question, Canada has adduced
evidence that clearly shows that establishing minimum
national standards of GHG price stringency to reduce GHG
emissions is of sufficient concern to Canada as a whole
that it warrants consideration in accordance with the
national concern doctrine. The history of efforts to
address climate change in Canada reflects the critical
role of carbon pricing strategies in policies to reduce
GHG emissions. There is also a broad consensus among
expert international bodies that carbon pricing is a
critical measure for the reduction of GHG emissions. This
matter is critical to our response to an existential threat to
human life in Canada and around the world. As a result, it
passes the threshold test and warrants consideration as a
possible matter of national concern.
Minimum national standards of GHG price stringency, which
are implemented by means of the backstop architecture of
the GGPPA, relate to a federal role in carbon pricing that is
qualitatively different from matters of provincial
concern. GHGs are a specific and precisely identifiable type of
pollutant. The harmful effects of GHGs are known, and the fuel
and excess emissions charges are based on the global warming
potential of the gases. GHG emissions are also
predominantly extraprovincial and international in their
character and implications. This flows from their nature
as a diffuse atmospheric pollutant and from their effect
in causing global climate change.
 Provincial inability is established in this case.
First, the provinces, acting alone or together, are
constitutionally incapable of establishing minimum
national standards of GHG price stringency to reduce
GHG emissions. Second, a failure to include one province
in the scheme would jeopardize its success in the rest of
Canada. The withdrawal of one province from the scheme
would clearly threaten its success for two reasons: emissions
reductions that are limited to a few provinces would fail
to address climate change if they were offset by
increased emissions in other Canadian jurisdictions; and
any province’s failure to implement a sufficiently stringent
GHG pricing mechanism could undermine the efficacy of GHG
pricing everywhere in Canada because of the risk of carbon
leakage. Third, a province’s failure to act or refusal to
cooperate would have grave consequences for extra-
provincial interests. It is well established that climate
change is causing significant environmental, economic and
human harm nationally and internationally, with especially
high impacts in the Canadian Arctic, coastal regions and
on Indigenous peoples.
The discretion of the Governor in Council is necessary in order
to ensure that some provinces do not subordinate or unduly
burden the other provinces through their unilateral choice of
standards. Although this restriction may interfere with a
province’s preferred balance between economic and
environmental considerations, it is necessary to consider the
interests that would be harmed — owing to irreversible
consequences for the environment, for human health and
safety and for the economy — if Parliament were unable to
constitutionally address the matter at a national level. This
irreversible harm would be felt across the country and would
be borne disproportionality by vulnerable communities and
regions in Canada. The impact on those interests justify the
limited constitutional impact on provincial jurisdiction
(Inherent National Concern).
FACILITATING INTERGOVERNMENTAL DIALOGUE: JUDICIAL
REVIEW OF THE VIEW OF THE DIVISION OF POWERS IN THE
SUPREME COURT OF CANADA
There are three different ways to attack a legislative measure
on division of powers grounds.
VALIDITY: PITH & SUBSTANCE DOCTRINE AND ANCILLARY
DOCTRINE:
The first is to challenge its validity. If the validity of an
entire legislative measure is challenged, the operative
doctrine is the “pith and substance doctrine”. Two step
analysis:
1. The court is first required to identify the essential
character (the “pith and substance”) of the legislation,
and
2. Then required to assign the legislation to a federal or
provincial head of legislative power.
If the essential character of the legislation is related to a head
of legislative power that has been allocated to the enacting
legislature, it is valid (“intra vires”); if not, it is invalid (“ultra
vires”).
In contrast, if the validity of only part of a legislative
measure is challenged, the operative doctrine is the
“ancillary doctrine” (or “necessarily incidental doctrine”).
Three step analysis:
1. Court is required to determine whether the provision
encroaches on the jurisdiction of the other level of
government. If not, the provision is intra vires the enacting
legislature.
2. But if so, the provision may nonetheless still be intra vires
the enacting legislature if: (a) it is part of a valid
legislative scheme; and (b) it is sufficiently integrated
into that legislative scheme.
3. The final step turns on the seriousness of the encroachment:
where the encroachment is minimal, it is sufficient if the
provision is “functionally related” to the legislative
scheme; but where the encroachment is not minimal, the
 provision must be “truly necessary” or “integral” to
the legislative scheme.
The Supreme Court did not discuss the ancillary doctrine in
Canadian Western Bank. However, in keeping with its recent
decisions, it did outline an approach to the pith and substance
doctrine that accommodates significant overlap in jurisdiction.
Under this approach, the essential character of legislation is
determinative. Legislation is permitted to have
“incidental” effects on the jurisdiction of the other order
of government, provided its essential character is related
to a legislative power that has been allocated to the
enacting legislature. “Incidental” is defined broadly to
include “effects that may be of significant practical
importance”. A court working in the classical paradigm
would limit the ability of both orders of government to impact
the jurisdiction of the other order of government. The
Supreme Court not only eschews this approach, it sets out an
approach that permits each order of government to impact
“significantly” the jurisdiction of the other order of
government. The result is to accommodate substantial
overlap in federal and provincial jurisdiction.
Double Aspect Doctrine under Pith and Substance:
The double aspect doctrine recognizes that both Parliament
and the provincial legislatures can adopt valid legislation on a
single subject depending on the perspective from which the
legislation is considered, that is, depending on the various
“aspects” of the “matter” in question.
Legislative measures directed at dangerous driving seem
to relate to both the federal criminal law power (on the
basis that they are directed at public safety) and the
provincial property and civil rights power (on the basis
that they are directed at the regulation of provincial
roads). The response of the classical paradigm to this problem
is to “mutually modify” the legislative heads of power: the
relevant legislative head of power of one order of government
would be interpreted as including jurisdiction over dangerous
driving, and the relevant legislative head of power of the other
order of government would be interpreted as excluding
jurisdiction over dangerous driving. The response of the
modern paradigm to this problem is the “double aspect”
doctrine: the federal legislative measure would be
sustained under the federal criminal law power, as a
measure directed at public safety, and the provincial
legislative measure would be sustained under the
provincial property and civil rights power, as a measure
directed at the regulation of provincial roads; the
ultimate effect is to assign jurisdiction over dangerous
driving to both the federal and provincial governments.
In Canadian Western Bank, the Supreme Court did affirm
the role of the double aspect doctrine in responding to the
problem of overlap in the heads of legislative power. It
noted that “some matters are by their very nature impossible
to categorize under a single head of power”, and in response,
it extolled the virtues of the double aspect doctrine, which, it
said, “ensures that the policies of the elected legislators of
both levels of government are respected”. As with the pith and
substance doctrine, the result is to accommodate significant
overlap in federal and provincial jurisdiction.
The exclusivity principle does not preclude the possibility of
any overlap whatsoever. Beyond allowing for incidental effects,
as discussed above, the exclusivity principle can also
accommodate “double aspects.”
As the O’Connor Report rightly pointed out, the
Constitution Act, 1867 does not grant either order of
government legal jurisdiction over things, but only
legislative authority over matters coming within the
enumerated subjects.
An “automobile” is neither a matter nor an enumerated
subject, and so there is nothing at the outset that would
logically preclude both orders of government from legislating
in respect of automobiles. In practice, the vast majority of
legislation relating to automobiles will deal with automobiles
as private property or as a commercial item, and as such, will
concern a matter that comes within the province’s power over
property and civil rights. On the other hand, no one would
doubt that Parliament possesses the power to criminalize an
individual’s use or operation of an automobile while impaired
by alcohol or drugs.
The double aspect principle is largely a function of the
uniqueness of the criminal law power. Most of the
subjects in sections 91 and 92 concern the regulation of
societal “goods” such as tangible property, commercial
conduct, and particular works and undertakings. The
criminal law power, by contrast, is a particular type of
legislation that engages virtually every facet of society
and is aimed at the suppression of evils. It is therefore
conceptually distinct. A province can outlaw drinking and
driving as part of its larger power to regulate the use of
automobiles on public highways. Parliament, conversely, can
outlaw drinking and driving because of the evil it presents:
unsafe streets and an increased likelihood of serious injury or
death.
The criminal law, if properly enacted, will not be part of a
larger regulatory scheme governing the use of automobiles on
public highways; it will simply impose a prohibition and a
penalty. The criminal law’s penalty will also likely include a
potential prison sentence; conversely, the provincial law’s
penalty will likely be less punitive — in most cases, a fine
and a license suspension.
Reference Re GGPPA case: “The double aspect doctrine has
no application in this case. While this doctrine allows for the
concurrent application of both federal and provincial
legislation, it does not create concurrent jurisdiction.
The Act purports to do exactly what the provinces can do, and
for precisely the same reason. There are simply no distinctly
federal aspects of the reduction of GHG emissions that cannot
be divided among the enumerated heads of power. The
imposition of minimum national standards cannot be described
as the distinctly federal aspect of the matter.”
Re Firearms Act case
Applicability: Doctrine of Interjurisdictional Immunity:
The second way to challenge a legislative measure on division
of powers grounds is to challenge its applicability. The
operative doctrine here is the doctrine of interjurisdictional
immunity. The doctrine of interjurisdictional immunity
restricts the extent to which otherwise valid legislation
of general application enacted by one order of
government can interfere with the “basic core” of any
subject that is under the jurisdiction of the other order
of government. Where it applies, the law is not struck down
as invalid; rather, the law is valid in most of its applications,
but is interpreted in such a manner that it will not apply
to the subject matter that is under the jurisdiction of the
other order of government. This process is referred to as
“reading down”. Applied in the case of Bell Canada v.
Quebec.
The Supreme Court in Canadian Western Bank reformulated
its approach to the doctrine in three ways.
1. First, it raised the threshold to engage the doctrine. The
doctrine will now apply only if the “basic, minimum and
unassailable” core of a legislative power granted to one
order of government would be impaired by a legislature
measure enacted by the other level of government. (Prior
to Canadian Western Bank, the threshold was merely
affects, not impairs.)
2. Second, it held that the doctrine should generally “be
reserved for situations already covered by precedent”.
3. Finally, it said that the doctrine should now normally be
considered after the federal paramountcy doctrine, at
least in “the absence of prior case law favouring its
application to the subject matter at hand”. (Prior to
Canadian Western Bank, the doctrine was usually
considered before the paramountcy doctrine.)
These changes are significant, because the basic concern of
the doctrine of interjurisdictional immunity is exclusivity of
jurisdiction, and the doctrine as it was framed had the
potential to limit significantly the overlap allowed under the
pith and substance doctrine. Now, it “leaves more room for
the concurrence of federal and provincial jurisdiction”.
Reasons for Stricter Application (and therefore more overlap):
1. Recent Trends in Jurisprudence: Recent division of
powers jurisprudence in Canada has allowed for “a fair
amount of interplay and indeed overlap between federal
and provincial powers” principled in the belief that courts
“should favour, where possible, the ordinary operation of
statutes enacted by both levels of government”.
Therefore, strong reliance on the doctrine of
interjurisdictional immunity is inconsistent with
this trend in the jurisprudence.
2. Cooperative Federalism: The second reason offered
speaks to “the importance of co-operation among
government actors to ensure that federalism operates
flexibly”.
3. Certainty in Scope of Division of Powers: Excessive
reliance on the doctrine of interjurisdictional immunity
would, it is suggested, “create serious uncertainty”,
because the doctrine requires judges to define the
core of the legislative powers. This is problematic,
because the core often lacks determinate scope.
4. Need to Avoid Legal Vacuums: Excessive reliance on
the doctrine of interjurisdictional immunity risks creating
legal vacuums, because laws enacted by one order of
government cannot effect the core of the jurisdiction of
the other order government, even in the absence of a
law enacted by that order of government.
5. Asymmetric Federalism: The fifth reason offered is that
the doctrine of interjurisdictional immunity has tended to
operate asymmetrically, in favour of federal
jurisdiction and at the expense of provincial
legislation, a practice that runs the risk of
unintentionally centralizing legislative power. This is
undesirable as “so many laws for the protection of
workers, consumers and the environment (for example)
are enacted and enforced at the provincial level”; and
inconsistent with “the principles of subsidiarity, i.e.
that decisions are ‘best [made] at a level of
government that is not only effective, but also
closest to the citizens affected’”.
 6. Unnecessary: It is always open to Parliament to enact
legislation in areas that it wishes to regulate that triggers
the doctrine of paramountcy, by making it “sufficiently
precise to leave those subject to it with no doubt as to the
residual or incidental application of provincial
legislation”.
This assumption, that accommodating overlap in legislative
power will encourage intergovernmental dialogue about
particular exercises of those legislative powers, requires
further exploration. The idea seems counterintuitive. Why
would one order of government need to engage in a process of
intergovernmental dialogue with the other order of
government if it has the legislative power to act? Is it not more
likely that it would simply act unilaterally? The Supreme Court
seems inclined to believe that this will not be the net result.
Why might it hold this view?
One benefit that has been claimed is that overlap operates as a
kind of democratic safeguard, allowing one order of
government to respond to a particular problem where
the other order of government fails to act, either
effectively or at all. This argument figures in the work of
American constitutional scholar Erwin Chemerinsky, who
refers to the benefits of “enhancing” and “empowering”,
not limiting, legislative power.
Another benefit is that overlap in legislative power inevitably
gives rise to situations in which both orders of government
wish to provide the same or similar goods and services to the
same constituents; this, in turn, gives rise to situations of
redundancy, where the involvement of both orders of
government may be of no (or even negative) benefit to those
constituents; governments, seeking to avoid these situations of
redundancy, will be inclined to work together, perhaps due
to political forces, or simply a desire to provide public
goods and services more efficiently, in an attempt to
ensure that this does not occur.
Operability: Paramountcy Doctrine:
The third way to challenge a legislative measure on division of
powers grounds is to challenge its operability. The operative
doctrine here is the paramountcy doctrine. The
paramountcy doctrine deals with situations of conflict
between otherwise valid, but overlapping, federal and
provincial legislation. Where there is a conflict, the
federal legislation prevails; the provincial legislation is
rendered inoperative; not entirely, but to the extent of
the inconsistency between the federal and provincial
legislation.
In Canadian Western Bank, the Supreme Court stated that it
must act with restraint, by tolerating significant overlap in
federal and provincial legislative power. It does so by
permitting both orders of government to enact legislation that
substantially impacts the jurisdiction of the other order
of government; by applying the double aspect doctrine to
permit both orders of government to regulate a given
subject area; and by restricting the application of the
doctrine of interjurisdictional immunity. The Supreme
Court largely limits itself to managing overlapping federal
and provincial legislation to avoid legislative conflict.
The key doctrine here is the paramountcy doctrine. However,
the Supreme Court restricts its reach, by interpreting
overlapping legislation to avoid conflict in operation, if
possible, and applying the doctrine in the situations that
remain. The operative assumption appears to be that
permitting overlap between federal and provincial legislative
power will act as an incentive to intergovernmental
dialogue about particular exercises of that legislative
power. The Supreme Court does not entirely forswear a role in
defining the scope of federal and provincial legislative power,
but it openly encourages the political branches to take
the lead in this regard, indicating that it will be prepared to
intervene only where one order of government
significantly upsets the existing balance of power.
However, the Supreme Court also emphasized that the
doctrine should be applied with restraint, because it
ultimately operates at the expense of provincial
jurisdiction and also reduces legislative overlap.
The Supreme Court affirmed, citing recent precedent, that
there are in fact two definitions of conflict:
1. A narrow impossibility of dual compliance test ,
which applies where it is impossible to comply with both
laws;
2. A broader “frustration of federal purpose” test ,
which applies where the operation of a provincial law
would frustrate the purpose of a federal law. To be used
with restraint. That conflict is not triggered merely by
overlapping legislation; that federal and provincial
statutes should be construed to avoid conflict, if at all
possible; and that an intention should not be imputed to
Parliament to “occupy a field” absent “very clear
statutory language”
Restraint is also evident in the Supreme Court’s application of
the doctrine to the facts of the case. The federal legislation
permitted banks to promote insurance, but prohibited
banks from acting “as agent for any person in the
placing of insurance”; the provincial legislation required
banks to hold a “restricted insurance agent’s certificate”
in order to promote insurance in the province. There
seemed to be an operative conflict. However, the Supreme
Court interpreted the definition of “agent” in the federal
legislation narrowly, so that it was possible to hold a
“restricted insurance agent’s certificate” for the
purposes of the provincial legislation, without also then
being an “agent” (as the provincial certificate seemed to
suggest) under the federal legislation.
The precise balance between unity and diversity in the
Canadian federal system confirms that federal
paramountcy cannot be assumed. It is well established
that the paramountcy doctrine is not expressly outlined
in the text of the Constitution, except in specific contexts
(under sections 92A, 94A and 95). In select cases, the Privy
Council and the Supreme Court appeared to take the view that
the textual anchor for the doctrine could be found in the
opening or concluding paragraphs of section 91,57 but these
paragraphs merely affirm the exclusivity principle, which
speaks to the validity and applicability of legislation. Indeed,
while Parliament undoubtedly has exclusive authority to
legislate on matters within the classes of subjects assigned to
it by the Constitution, provincial legislatures also possess
exclusive authority to legislate on matters within the classes of
subjects to which they have been assigned.58 As a result, the
Supreme Court confirmed in the Reference re
Remuneration of Provincial Judges that the paramountcy
doctrine is in fact “nowhere to be found in the
Constitution Act, 1867.”
PEACE, ORDER AND GOOD GOVERNMENT
The Constitution Act, 1867 (“Constitution”) has a chapter in it
called the Distribution of Legislative Powers. This chapter
divides law making authority (heads of power) between the
federal and provincial governments. If a government makes a
law outside of its listed powers, that law is unconstitutional.
The federal powers are listed in section 91 of the
Constitution and, among others, the list includes powers
like currency, navigation, copyrights, and the military.
The introduction to section 91 includes a clause that
grants Parliament additional lawmaking powers beyond
its list. It reads: “It shall be lawful for the Queen … to make
Laws for the Peace, Order, and good Government of
Canada, in relation to all Matters not coming within the
Classes of Subjects by this Act assigned exclusively to the
Legislatures of the Provinces.”
The intention was that any area of law not originally divided
between the provinces and Parliament would become
Parliament’s responsibility. The Peace, Order and Good
Government clause is popularly known as ‘POGG’. POGG
powers have since evolved to three branches of power that
justify the use of the POGG clause:
1. Emergency: “the temporary and extraordinary need
for national regulation of a particular subject matter”;
 2. Residual/Gap: “the power to make laws on matters that
are not enumerated” in the Constitution; and
3. National Concern: “the power to make laws in relation
to matters that go beyond local or provincial concerns or
interests, and are, due to their inherent nature,
concerns of the Dominion of Canada as a whole.”
Emergency Branch: (Ontario (Attorney General) v
Canada Temperance Federation, [1946])
There are two requirements for the use of Parliament’s
emergency powers:
1. There must be a rational basis for the legislation; and
2. The legislation must be of a temporary nature.
The Supreme Court of Canada (“SCC”) listed these
requirements when deciding whether a law passed by
Parliament to combat inflation in the 1970s (that clearly
encroached on provincial authority) using the emergency
branch, was constitutional. Past examples of emergencies
include pestilence, drink or drug traffic, the carrying of
arms, and the passing of the War Measures Act in
response to World War I.
Residual/Gap (Friends of the Oldman River Society v
Canada (Minister of Transport) [1992]):
The language of the POGG clause makes it clear that “any
matter which does not come within a provincial head of
power must be within the power of the federal
Parliament.” The distribution of powers is thus exhaustive.
However, new, or unrecognized matters to the Constitution do
not default to federal authority. It must first be determined
whether the matter fits under an existing head of power. For
example, the environment has been found to fall within both
provincial and federal heads of power.
Gaps occur when the Constitution recognizes a matter “but
fails to deal completely with the topic;” for example
incorporating companies with national objects. They also occur
when a matter is outside of provincial authority, such as within
federal institutions, or on land or waters that are Canadian but
outside of any provincial boundary.
National Concern (Reference Re Greenhouse Gas Pollution
Price Act):
The SCC determined that if the real subject matter of a law
“goes beyond local or provincial concern or interest and
must from its inherent nature be the concern of the
Dominion as a whole,” it will fall under the national concern
branch. Some examples include radio, aeronautics, marine
pollution, and nuclear energy. A court will consider the
following points to determine if a matter is of national concern,
making it permanently within federal jurisdiction:
1. Is the matter distinguishable from a national emergency
which is only for legislation “of a temporary nature;”
2. Is it a new matter that did not exist at the time of
Confederation, or a matter that although “of a local or
private nature in a province” has become “matters of
national concern;”
3. Does it have a “singleness, distinctiveness and
indivisibility that clearly distinguishes it from matters of
provincial concern” and does it not encroach on
provincial jurisdiction so much that it unbalances the
distribution of law-making powers; and
4. In regard to its distinctive nature, how would other
provinces be affected by “a provincial failure to deal
effectively with the control or regulation of the intra-
provincial aspects of the matter.”
COLOURABLE LEGISLATION (CANADA)
Colourability is a concept that goes against
Canadian federalism because the Constitution has assigned
certain powers to the federal jurisdiction under section 91 and
to the provincial realms under section 92.[1] It occurs when
either the federal government or any of the provincial or
territorial governments, attempts to introduce
legislation that may appear to address one issue within
the scope of its power but in fact it is a disguised
attempt to address something that is outside its
jurisdiction. Or, in the words of constitutional scholar
Peter Hogg, colourable legislation occurs when a
jurisdiction attempts to pass a law indirectly that it
cannot pass directly so that it “may accomplish its
original goal.”[2]
I. R v Morgentaler (1993) [Abortion case, where
Doctrine of Pith and Substance was used]:

Morgentaler planned to open an abortion clinic in Nova

Scotia. The provincial government immediately passed
legislation that would outlaw abortion clinics and limit
the procedure to hospitals only. However, the
regulations introduced were not limited to abortions.
The province added procedures like liposuction and
anything it claimed would jeopardize public health care
in favour of a private system. Offenders would face
criminal penalties. Morgentaler proceeded to open his
clinic anyway and was charged. He then challenged the
constitutionality of the provincial law that outlawed
abortion clinics.[4] The Supreme Court agreed with the
argument that specific abortion regulations, rather
than being a valid provincial regulation of hospitals
and medicine, instead constituted an invalid criminal
law. As a result, all regulations introduced in the
legislation were struck down, including those not
dealing with abortion. Hogg argues that this was an
example of colourability: Nova Scotia may have
simply wished to limit abortions in the province,
 and so it introduced other legislation as a
package that would accomplish more than one
goal.

II. Kruger v. The Queen (1978):

Neither a provincial legislature nor Parliament may

pass legislation which is a ‘colourable’ attempt to
regulate an area outside its jurisdiction. But the
“presumption is for the validity of a legislative
enactment” and, as such, “in the absence of
evidence to the contrary”, a court will not make a
finding that legislation is a colourable attempt to
regulate outside the enacting body’s powers.

Colourability is often thought of as a negative term that

should be used both carefully and sparingly. According
to Hogg, the adjective ‘colourable’ carries a strong
connotation of disapproval or even suspicion of the
means by which the legislative body sought to carry
out the policy.[8] Therefore, when examining whether
legislation is out of, or ultra vires, a particular
jurisdiction one should not jump to the conclusion that
the legislation is attempting to achieve some ulterior
or subversive purpose.[9]
INDIAN DOCTRINES:
1. PITH AND SUBSTANCE:
Where America and Australia had one list, and Canada had
two, India has had three lists, first under the Government of
India Act, 1935 and then under the 1949 Consitution: an
exclusive list of federal powers, an exclusive list of state
powers (or before independence province powers), and a
concurrent list. Moreover, by section 100 of the Government of
India Act and article 246 of the Constitution, the three lists
are carefully arranged in a rigid hierarchy of super - and
subordination: the powers in the federal list are
exclusive notwithstanding anything in the other two
lists; the concurrent powers can be exercised at either
level subject to the federal list and notwithstanding
anything in the state list; and the state powers are given
only subject to the other two lists.
Under the Government of India Act there were several
attempts to argue that this hierarchical arrangement left no
room for a test of "pith and substance": the rigid definitions of
exclusive fields, and the absolute supremacy of the federal list,
meant that the provinces (as they then were) could not
trespass upon the areas of exclusive federal power at all, not
even by laws which in "pith and substance" were clearly within
provincial power.
The doctrine states that within their respective spheres the
state and the union legislatures are made supreme, they
should not encroach upon the sphere demarcated for the other.
 However, if one among the state and the Centre does
encroach upon the sphere of the other, the courts will
apply the Doctrine of Pith and Substance.
 If the pith and substance i.e., the true object of the
legislation pertains to a subject within the competence of
the legislature that enacted it, it should be held to be
intra vires although it may incidentally encroach on the
matters not within the competence of the legislature.
I. Prafulla Kumar Mukherjea v. Bank of Commerce
Ltd., Khulna:

In one of the last appeals to the Privy Council before

Independence, in a case involving the validity of the
Bengal Money-Lenders Act, 1940, that argument
was decisively rejected: so long as the provincial
legislation was valid in "pith and substance", it did not
matter if it had some "incidental" or "ancillary" effect
on something in the federal list. The Privy Council
insisted on retaining it in order to preserve
flexibility. Lord Porter explained that the rigid
alternative view would mean that "much
beneficent legislation would be stifled at birth,
and many of the subjects entrusted to Provincial
Legislation could never effectively be dealt with.

And he quoted what Sir Maurice Gwyer had said in the

pre-independence federal court: given the inevitability
of overlap, the “pith and substance” test was needed
because without it, “blind adherence to a strictly
verbal interpretation would result in a large
number of statutes being held invalid.”

II. State of Karnataka v Drive-In Enterprises (AIR

2001 SC 1328):

The levy of tax in respect of “drive-in-cinema” was in

issue. A drive-in cinema means a cinema with an open-
air theatre premises into which admission may be
given normally to persons desiring to view the cinema
while sitting in motorcars. The State, in addition to
charging entertainment tax on persons being
entertained, levied entertainment tax on
admission of cars inside the theatre. The question
arose whether the State Legislature was competent
to enact law to levy tax under Entry 62, List II of
the 7th Schedule on admission of cars/ motor
vehicles inside such theatre. Entry 62 empowers
 the State Legislature to levy tax on “luxuries,
entertainment, amusements, betting and
gambling”.

The apex court held that what is to be found out is the

real nature of levy, its pith and substance and it is
in this light the competency of the State
Legislature is to be adjudged.

The doctrine of ‘pith and substance’ means that if an

enactment substantially falls within the powers
expressly conferred by the Constitution upon the
Legislature, it cannot be held to be ultra vires
merely because its nomenclature shows that it
encroaches upon matters assigned to another
heading of legislation. In the present case, the real
nature and character of impugned levy is not on the
admission of cars/motor vehicles, but the levy is on
the person entertained who takes the car inside
the theatre and watches the film sitting in his car.
Thus, in pith and substance, the levy is on the person
who is entertained and it is wholly immaterial in what
name and form it is imposed. The word
“entertainment” is wide enough to comprehend in
it the luxury or comfort with which a person
entertains himself. Once it is found that there is a
nexus between the legislative competence and
subject of taxation, the levy is justified and valid.

III. State of Bombay v FN Balsara:

The Bombay Prohibition Act of 1949 prohibited the

sale, consumption, and manufacture of alcoholic
beverages in the state of Bombay. It was challenged on
the ground that it accidentally encroaches upon import
and export of liquor across custom frontier – a central
subject. The court while upholding the impugned
legislation declared that the Act was in pith and
 substance a State subject even though it
incidentally encroached upon a central subject.

IV. Atiabari Tea Co. Ltd. v. State of Assam (1961)

[Gajendragadkar, J.]

For the majority, had explained the purpose of the rule

of pith and substance thus: “The test of pith and
substance is generally and more appropriately applied
when a dispute arises as to the legislative competence
of the legislature, and it has to be resolved by
reference to the entries to which the impugned
legislation is relateable, when there is a conflict
between the two entries in the legislative list, and
legislation by reference to one entry would be
competent but not by reference to other, the doctrine
of pith and substance is invoked for the purpose
of determining the true nature and character of
the legislation in question.”

In this process, it would also be necessary for the

courts to examine the true nature and character of the
enactment, its object, its scope and effect to find
out whether the enactment in question is
genuinely referable to a field of the legislation
allotted to the respective legislature under the
constitutional scheme.

2. DOCTRINE OF REPUGNANCY (BASED ON PRINCIPLE OF

LEGISLATIVE SUPREMACY OF THE UNION GOVT.)

254. Inconsistency between laws made by

Parliament and laws made by the Legislatures of
States.—(1) If any provision of a law made by the
Legislature of a State is repugnant to any provision of a
law made by Parliament which Parliament is competent
to enact, or to any provision of an existing law with
respect to one of the matters enumerated in the
Concurrent List, then, subject to the provisions of
 clause (2), the law made by Parliament, whether
passed before or after the law made by the
Legislature of such State, or, as the case may be,
the existing law, shall prevail and the law made by
the Legislature of the State shall, to the extent of
the repugnancy, be void.

(2) Where a law made by the Legislature of a State 1

*** with respect to one of the matters enumerated in
the Concurrent List contains any provision repugnant
to the provisions of an earlier law made by Parliament
or an existing law with respect to that matter, then, the
law so made by the Legislature of such State shall, if it
has been reserved for the consideration of the
President and has received his assent, prevail in
that State.

Provided that nothing in this clause shall prevent

Parliament from enacting at any time any law with
respect to the same matter including a law adding to,
amending, varying or repealing the law so made by the
Legislature of the State.

I. UCO Bank & Anr v. Dipak Debbarma (2016):

In case of a Central and a State Act on any field of

entry mentioned in List III of the Seventh Schedule
(Concurrent List). To such a situation of repugnancy
or inconsistency, the provisions of Article 254 of the
Constitution would apply. If there is such an
inconsistency, Article 254(1) makes it very clear
that the central law will prevail subject, however,
to the provisions of Article 254(2) and further
subject to proviso to Article 254(2).

The second situation of repugnancy or inconsistency is

between to a subsequent Central law covered by an
Entry of List I and an earlier State law relatable to
one or more Entries of List II. How such a
 situation is to be resolved and answered and
which legislation would have primacy is the moot
question that arises for consideration by the
Courts.

II. M. Karunanidhi v. Union of India:

J. Fazal Ali, speaking for the Court referring to the

earlier authorities opined that the following
propositions emerge:

1. That in order to decide the question of repugnancy it

must be shown that the two enactments contain
inconsistent and irreconcilable provisions, so
that they cannot stand together or operate in the
same field.
2. That there can be no repeal by implication unless
the inconsistency appears on the face of the two
statutes.
3. That where the two statutes occupy a particular
field, there is room or possibility of both the statutes
operating in the same field without coming into
collision with each other, no repugnancy results.
4. That where there is no inconsistency but a statute
occupying the same field seeks to create distinct
and separate offences, no question of
repugnancy arises and both the statutes
continue to operate in the same field.

3. DOCTRINE OF COLOURABLE LEGISLATION:

Doctrine of Colorable Legislation or a fraud on the

Constitution is built upon the founding stones of the
doctrine of Separation of Power. Separation of Power
mandates that a balance of power is to be struck between
the different components of the State i.e. between the
Legislature, the Executive and the Judiciary. The
Primary Function of the legislature is to make laws.
Whenever, Legislature tries to shift this balance of
power towards itself then the doctrine of ‘Colorable
Legislation’ is attracted to take care of Legislative
Accountability. When power is exercised in bad faith to
attain ends beyond the sanctioned purposes of
power by simulation or pretension of gaining a
legitimate goal, it is called colourable exercise of
power.

I. Naga People's Movement of Human Rights v.

Union of India [Krishna Iyer J.]:

Held that 'colourable legislation' is enacting by

the Legislature of a legislation seeking to do
indirectly what it cannot do directly. The
motive of the legislature is irrelevant to
castigate an Act as a colourable device as
ascertained by Justice V.R. Krishna Iyer.

II. K.C. Gajapati v. The State of Orissa:

Reviewing whether the Orissa Estates Abolition

Act, 1952 was a colourable piece of legislation as
against the Orissa Agricultural Income-tax
(Amendment) Act of 1950. It was contended that
it was not a bona fide taxation statute at all. It
was contended that the real object of which
was to reduce, by artificial means, the net
income of the intermediaries, so that the
compensation payable to them under the Act
might be kept down to as low a figure as
possible.

Justice Mukherjea observed: “….the question

whether a law was a colourable legislation and as
such void did not depend on the motive or bona
fides of the legislature in passing the law but
upon the competency of the legislature to
pass that particular law, and what the courts
 have to determine in such cases is whether
though the legislature has purported to act within
the limits of its powers, it has in substance and
reality transgressed those powers, the
transgression being veiled by what appears,
on proper examination, to be a mere pretence
or disguise. The whole doctrine of colourable
legislation is based upon the maxim that you
cannot do indirectly what you cannot do
directly….”

According to the Supreme Court, the impugned

Act was in substance and form a law in respect to
the "taxing of agricultural income", as
described in entry 46 of List II of the Seventh
Schedule to the Constitution. The State
Legislature was competent to legislate on
this subject, the Act was not void, and the fact
that the object of the legislature was to
accomplish another purpose, viz., to reduce the
compensation payable under the Estates Abolition
Act, cannot render this law a colourable
legislation and void. It was ruled that the
ulterior object itself was not beyond the
competence of the legislature.

4. DOCTRINE OF RESIDUARY POWER:

The three Lists are drawn very elaborately and

presumably all subject-matters identifiable at the time of
the constitution-making, and regarding which a
government could conceivably be called upon to make
laws in modern times, have been assigned to one of the
Lists. But it is humanly not possible to foresee every
possible activity and assign it to one List or the other.

Therefore, the residuary power is intended to take care of

such matters as could not be identified at the time of the
constitution-making. Further, the framers of the
Constitution were designedly devising for a strong
Centre. Moreover, the present is an era of fast
technological advancement, and no one can visualize
future developments and exigencies of government.
Something unforeseen may happen and some new matter
may arise calling for governmental action. To meet this
difficulty, the Constitution provides that the residue will
belong exclusively to the Centre. This is provided for in
Art. 248 read with entry 97, List I. These provisions
take care of any unforeseen eventuality. Entry 97,
List I, runs as : “Any other matter not enumerated
in List II or List III including any tax not mentioned
in either of those Lists.” Article 248(1) says :
“Parliament has exclusive power to make any law
with respect to any matter not enumerated in the
Concurrent List or State List.”

I. Jaora Sugar Mills v. State of Madhya Pradesh:

Parliament’s residuary power is not to be

interpreted so expansively as to whittle down the
power of the State Legislatures. “Residuary should not
be so interpreted as to destroy or belittle State
autonomy.” It has been emphasized that in a Constitution
like ours “where there is a division of legislative subjects
but the residuary power is vested in Parliament, such
residuary power cannot be so expansively interpreted as
to whittle down the power of the State Legislatures”. To
do so would be to affect the federal principle adversely. If
there is competition between an entry in List II and the
residuary power of the Centre, the former may be given a
broad and plentiful interpretation.

II. Union of India v. HS Dhillon:

If the law does not fall in the State List, the Parliament
has legislative competence to enact the law by virtue of
its residuary power and it would not be necessary to go
 into the question whether it falls under any entry in the
Union List or the Concurrent List.

5. DOCTRINE OF OCCUPIED FIELD:

If a particular subject matter or field is exclusively occupied by
legislation at one level of the government, then the other level
of government cannot legislate on the same subject matter.
I. Hindustan Lever v. State of Maharashtra:
If the matter is within the exclusive competence of the State
Legislature i.e. List II, then the Union Legislature is prohibited
from making any law with regard to the same. Similarly, if any
matter is within the exclusive competence of the Union, it
becomes a prohibited field for the State Legislatures. The
concept of occupied field is relevant in the case of laws
made with reference to entries in List III has to be
applied only to the entries in that list. The express words
employed in an entry would necessarily include
incidental and ancillary matters so as to make the
legislation effective
II. Ishwari Sugar Mills v. State of Uttar Pradesh
Legislative power of the States under entry 24, List II, is
eroded only to the extent control is assumed by the Union
pursuant to a declaration made by Parliament in respect of
declared industry as spelt out by legislative enactment and the
field occupied by such enactment is the measure of erosion.
Subject to such erosion, on the remainder, the State
Legislature will have power to legislate in respect of
declared industry, without in any way trenching upon the
occupied field.
III. State of Rajasthan v Vatan Medical & General
Store (AIR 2001 SC 1937):

It was held that once the impugned enactment is within

the four corners of the entries in List II (State List), no
Central Law whether made with respect to an
entry in List I or in List III can affect the validity
 of such State enactment. The argument of occupied
field is totally out of place in such a context. The said
argument proceeds upon wrong premises that once a
field is covered by Central Legislation referable to List
I, the power of the State Government to legislate in the
field covered by an entry in List II is taken away
without dealing with the doctrine of pith and substance
and by ignoring the well-settled position of law that the
doctrine of covered field has to be applied only to
entries in List III (vide Me Dowell & Co. case, AIR
1996 SC 1627). The court further held that once
an enactment, in pith and substance, is relatable
to Entry 8 in List II or for that matter any other
entry in List II, Art. 246 cannot be brought into to
hold that State Legislature is not competent to
enact that law.

6. FULL FAITH AND CREDIT CLAUSE: ARTICLE 261 OF COI:

261. (1) Full faith and credit shall be given throughout the
territory of India to public acts, records and judicial
proceedings of the Union and of every State.
(2) The manner in which and the conditions under which the
acts, records and proceedings referred to in clause (1) shall be
proved and the effect thereof determined shall be as provided
by law made by Parliament.
(3) Final judgments or orders delivered or passed by civil
courts in any part of the territory of India shall be
capable of execution anywhere within that territory
according to law.
7. ASPECT/HARMONIOUS CONSTRUCTION DOCTRINE:

I. Federation of Hotel and Restaurant Association

(FHRA) vs. Union of India:
The Government of India enacted the Expenditure Tax
Act, 1987, which imposed a tax on the expenditure
incurred by a particular class of hotels (hotels whose
per-room charge exceeded INR 400 per day per
individual). The constitutional validity of the same was
challenged before the Supreme Court in the Federation
of Hotel and Restaurant Association vs. Union of
India (‘Federation case’).

By its very nature, the class of hotels that the

legislation targets are high-class hotels which provide
luxurious accommodation services to their patrons.
Urging the Court to disregard the nomenclature of the
tax, the petitioners argued that the tax was effectively
on the provision of ‘Luxury’, which is an item in the
State list.

On the other hand, Attorney General K. Parasaran

submitted that the legislation in question did not fall
under List II, as the expenditure tax in Pith and
Substance could not be considered to fall under the
item ‘Luxuries’ at all. Furthermore, the Attorney
General submitted that the division of legislative
powers specifically recognized the demarcation of
‘distinct aspects’ of the same matter as ‘distinct
topics of legislation’. Therefore, legislating on the
‘expenditure aspect’ of luxury would constitute a
separate legislative head from luxury itself.

Accepting the arguments of the Union, the Supreme

Court stressed the need to interpret the list entries
harmoniously. The Supreme Court noted the possibility
of the same transaction involving two or more taxable
events in its different aspects. It did not matter,
therefore, that the Expenditure tax imposed was
specifically on the provision of Luxury services as
opposed to a general Expenditure tax. The same can
therefore be justified by invoking the Union’s residuary
powers under Entry 97 of List 1.
II. All India Federation of Tax Practitioners vs. Union
of India (‘Service Tax case’):

The case involved challenges to the validity of Service

Tax imposed on professionals such as Chartered
Accountants. The Petitioners argued that the State
Government has the exclusive legislative competence
to impose a tax on ‘Professions, Trades, Callings
and Employment’ under List II Item 60.

The Supreme Court, however, upheld the validity of

service tax by invoking the Aspects doctrine. While List
II item 60 contemplates a tax on the ‘Status aspect’ of
being a professional, the Supreme Court held that the
Service tax is a tax on the ‘Service aspect’ of
being a professional.

In a lecture titled “The Constitution, Federalism and

GST” delivered at NALSAR, Senior Advocate Arvind P.
Datar argued that the Aspect theory originated in
Canada due to its unique Constitutional structure and
has been wrongly invoked in Indian Constitutional Law.
While both lists envision an exclusive division of
powers, the Canadian List differs from the Indian List
in two crucial ways: firstly, the entries in the Canadian
List are fewer in number and worded in a very open-
ended manner, and secondly, the Canadian lists do not
have any concurrent list like India.

As we’d seen earlier, the distribution of taxation

powers in Canada is based on a distinction of ‘Direct
vs. Indirect’ taxes, whereas India has a much more
detailed distribution of taxation powers. Consequently,
overlaps of legislative fields were much more likely in
the Canadian Constitution. In order to harmoniously
interpret the Canadian Constitution, it would become
necessary to recognize the possibility of a particular
legislation drawing its source equally to both lists.
 However, if aspects doctrine is being applied, then the
Courts tend to only look at the two distinct aspects of a
subject and hold it valid without referring to the
doctrine of repugnancy. The abovementioned cases
also focus only on the distinct aspects without
understanding its consequences, as one can always
view a tax from different angles and hold it valid.

III. BSNL vs. Union of India (‘BSNL’):

In fact, the Supreme Court has, in some cases,

exercised caution and refused to invoke the Aspect
theory. One such instance includes the case of BSNL
vs. Union of India (‘BSNL’). With the introduction of the
Service Tax, the Union imposed a service tax on the
provision of sim card services. However, the sale of the
physical sim card was subject to sales tax, which fell
under the State’s domain. The State sought to tax the
value of services offered by the Sim Card provider by
invoking the Aspects doctrine. They contended that
what constituted services in one aspect could be
considered a sale in another aspect, thereby bringing
in two aspects in a single transaction. While the
Supreme Court did not question the validity of the
aspects doctrine, it clarified that the Aspects doctrine
could be invoked only when there is an overlapping of
legislative entries and not to examine the factual
reality of the transaction.

IV. Imagic Creative vs. CCT:

The Supreme Court’s refusal to invoke the aspects

doctrine in cases of Service vs. Sales Tax can also be
seen in the case of Imagic Creative vs. Commissioner
of Commercial Tax, which dealt with an advertising
agency providing advertising material (i.e., design
brochures, annual reports, etc.) to their clients. Once
again, the Court refused to view the factum of the
transaction (provision of the material) as having both a
sale as well as a service aspect.
US DOCTRINES
1. DOCTRINE OF PRE-EMPTION:
The removal of one or more legislative, executive, and/or
administrative powers by a superior government from
one or more inferior governments within a nation or a
state is termed “pre-emption.” A constitution or the
legislature of a superior government may pre-empt completely
and/or partially powers of one or more inferior governments or
stipulate that a power is superseded only if certain conditions
exist within an inferior government. The latter type is known
as “contingent pre-emption.”
Section 10 of Article I of the U.S. Constitution contains an
absolute, complete pre-emption provision: “No State shall
enter into any treaty, alliance or confederation, grant letters of
marque and reprisal; coin money; emit bills of credit; make
anything but gold and silver coin a tender in payment of debts;
pass any bill of attainder, ex post facto law, or law impairing
the obligation of contracts, or grant any title of nobility.”
(Currency printing, international relations, ex post facto
laws, title of nobility) The section alternatively can be
termed a restraint on the exercise of state powers.
The section also contains a pre-emption provision that may be
waived by Congress granting its consent for states to enter
into a interstate compact or a compact with a foreign
nation, place a duty on tonnage, or have troops or ships
of war “unless actually invaded, or in such imminent
danger as will not admit of delay.”
Preemption statutes, by removing a significant number of
states’ regulatory powers, produced a silent revolution in the
U.S. federal governance system altering fundamentally the
balance of national-state regulatory powers. Complete
preemption statutes make certain regulatory policies
harmonious throughout the nation, and minimum preemption
ones, while allowing for a degree of state regulatory
discretionary authority, have made state policies more
harmonious. There are fourteen types of complete preemption
statutes ranging from ones removing all regulatory authority
from states to ones allowing states to cooperate with federal
departments and agencies in conducting inspections and/or
enforcing federal standards.
Responding to environmental pollution, Congress designed a
new type of preemption statute, termed “minimum standards
preemption,” redesigning national-state regulatory
relationships. The Water Quality Act of 1965, now the
Clean Water Act, authorizes the secretary of the interior
(now the Environmental Protection Agency [EPA]
administrator) to promulgate rules and regulations
establishing nationally uniform water quality standards
and to delegate regulatory primacy to a state submitting
proposed standards meeting or exceeding the national
ones and an enforcement plan demonstrating the
competence of its enforcement personnel and the
adequacy of needed equipment. If the state standards and
enforcement plan are approved, the EPA performs a
monitoring role and intervenes only if a state is not enforcing
the standards. Minimum standards preemption reflects
the principle of subsidiary holding a competent
government closest to the people should be responsible
for a function. A state is free to return regulatory primacy to
the national agency at any time, and a small number of states
on occasion have done so. This type of preemption statute also
may be labeled a contingent one, based upon the gun behind
the door theory, in that the failure of a state to submit an
approved plan results in the agency enforcing national
standards within the state.
Congress also has employed minimum standards preemption
in attacking air pollution, drinking water, and surface mining
problems. The Air Quality Act of 1967, now the Clean Air
Act, is unusual in containing a complete preemption provision
in addition to minimum standards preemption. The act
preempts the regulation of exhaust emissions from 1968 and
subsequent model motor vehicles. The complete preemption
provision is the product of lobbying by the motor vehicle
manufacturers, who were fearful that they might have to
build a different engine or exhaust system for vehicles
sold in each of the 50 states.
The enactment of numerous congressional preemption
statutes has resulted in states losing a significant
portion of their reserved regulatory powers. Nevertheless,
it is important to note preemption statutes have encouraged
states to employ powers previously unexercised or exercised to
a very limited extent. Minimum standards preemption statutes
in particular offer strong encouragement to state legislatures
to exercise more fully their reserved regulatory powers and to
set higher standards if they wish.
I. McCulloch v. Maryland (1819):

Chief Justice John Marshall of the U.S. Supreme Court

wrote, “[L]et the end be legitimate, let it be within the
scope of the Constitution, and all means which are
appropriate, which are plainly adapted to that end . . .
are constitutional.” This decision clarifies Congress
may enact a “field pre-emption” statute
completely depriving state legislatures of
authority to enact regulatory statutes in a
specified field for the first time.

II. Southern Railway Company v. Reid (1912):

Southern Railway Company v. Reid (1912) is an early

preemption case in which the Supreme
Court invalidated a North Carolina statute
requiring common carriers to transport freight to
out-of-state locations as soon as it was received.
Speaking for the Court, Justice McKenna said that
between federal and state, one must be paramount,
and when it speaks the other must remain silent,
thus preempting that subject. Because the federal
government had enacted the Hepburn Act of 1906,
forbidding interstate shipment of goods until
rates had been filed and published, the federal
 government had “occupied the field,” leaving no room
for state regulation of the same subject matter.

2. DOCTRINE OF SUPREMACY:
The second and third sections of Article VI of the U.S.
Constitution provide, The Constitution and the Laws of the
United States which shall be made in Pursuance thereof; and
all Treaties made, or which shall be made, under the
Authority of the United States, shall be the supreme Law
of the Land; and the Judges in every State shall be bound
thereby, any Thing in the Constitution or Laws of any State to
the Contrary notwithstanding. The Senators and
Representatives. . . and the Members of the several State
Legislatures, and all executive and judicial Officers, both of the
United States and of the several states, shall be bound by Oath
or Affirmation to support [the] Constitution.
The Supremacy Clause reflects the framers’ concern that
the states, if left to their own devices, would ignore the
new national government and, even worse, would
encroach upon the powers and authority of the central
government.
If the states were to govern according to their own pleasure
without regard for the other states or for the needs of the
union, the framers of the Constitution feared that anarchy
would ensue and that in the long run the Constitution and the
union among the 13 original states would perish. Seen in this
light, the Supremacy Clause, with its assertion that the new
Constitution and all laws and treaties made under it are the
supreme law of the land, represents an attempt on the part of
the framers to protect the federal government from the states
and, more to the point, to ensure its survival.
I. Missouri v. Holland (1920):

Missouri challenged the validity of a migratory bird

treaty that the United States had reached with Canada.
The treaty limited the hunting of Canadian birds on
migration to the United States. Missouri, which had
 preexisting laws that conflicted with the new treaty,
sought an injunction against the treaty.

Justice Oliver Wendell Holmes noted that the

language of the Supremacy Clause makes national
treaties supreme to any state law. This is true even
if the treaty conflicts with or broaches upon an area
traditionally governed by the states.

II. Gibbons v. Ogden (1824):

New York had refused to recognize the authority

of Congress to regulate commerce that crossed
borders into and from New York. Furthermore, the
Empire State questioned Congress’s authority to
regulate waterways in New York used in the trafficking
of goods from state to state. The Court, reasoned that if
the Supremacy Clause means anything, it must mean
that where there is a conflict between legitimate
federal and state laws, the federal law must prevail.

3. NECESSARY AND PROPER CLAUSE/IMPLIED POWERS

DOCTRINE/ELASTIC CLAUSE:

Article I, Section 8, provides, “The Congress shall have

Power . . . To make all Laws which shall be necessary
and proper for carrying into Execution the foregoing
Powers, and all other Powers vested by this Constitution
in the Government of the United States, or in any
Department or Officer thereof.”

When the constitutionality of the bank was challenged in

McCulloch v. Maryland (1819), Chief Justice John
Marshall asserted “[necessary] frequently imports no
more than that one thing is convenient, or useful, or
essential to another.” In a sweeping claim, Marshall
posited an interpretation of federal sovereignty at least as
expansive as that suggested by Hamilton: “Let the end be
legitimate, let it be within the scope of the constitution,
 and all means which are appropriate, which are plainly
adapted to that end, which are not prohibited, but consist
with the letter and spirit of the constitution, are
constitutional.” Maryland’s attempt to favor local, state-
chartered banks was thwarted by this clause. Later this
expansive reading of the clause was reaffirmed in
Gibbons v. Ogden (1824).

Corporations have been established to manufacture

merchant vessels and aircraft as part of the war
power. This clause was also combined with the Interstate
Commerce Clause to justify the formation of corporations
to build railroads and interstate bridges. The
Necessary and Proper Clause has been at the root of the
development of almost all federal criminal law. Despite
the fact that the Constitution enumerates only
several crimes under federal jurisdiction, the U.S.
Code has grown to include more than 500 penal
infractions. Thus, Congress has begun to share even
the states’ police power.

4. FULL FAITH AND CREDIT CLAUSE:

Full faith and credit is the requirement, derived from

Article IV, Section I of the Constitution, that state
courts respect the laws and judgments of courts
from other states. This clause attempts to prevent
conflict among states and ensure the dependability of
judgments across the country. This does so by requiring
courts to follow the judgments made on the same issue in
another state. Otherwise, individuals could simply go to
another state to relitigate issues that did not receive
favorable judgments in previous cases, and this would
result in states having different judgments that could
cause competition among states. Therefore, the full
faith and credit clause prevents this kind of
relitigation, under the doctrines of res judicata and
issue preclusion, as long as the state issuing the
 original judgment had jurisdiction to do so. This same
principle also applies to certain
kinds of laws among different states like marriage.

While the full faith and credit clause typically applies,

sometimes courts may disregard the judgments of other
courts based upon the prior court not having jurisdiction
or following constitutionally required procedures.

5. ANTI-COMANDEERING DOCTRINE:

The Supreme Court has long held that states do not have
to be active participants in the enforcement or
effectuation of federal acts or regulatory programs.
Congress may not simply “commandee[r] the legislative
processes of the States by directly compelling them to
enact and enforce a federal regulatory program.

I. New York v. United States (1992)

The New York holding that Congress may not

“commandeer” state regulatory processes by
ordering states to enact or administer a federal
regulatory program limited congressional
power previously recognized in dictum.

While Congress has substantial powers to

govern the Nation directly, including in areas of
intimate concern to the States, the Constitution
has never been understood to confer upon
Congress the ability to require the States to
govern according to Congress’ instructions.

II. Printz v. United States:

The court majority declared this provision of
the Brady Gun Bill unconstitutional.

Extending the principle applied in New York, the

Court in Printz v. United States held that Congress
 may not “circumvent” the prohibition on
commandeering a state’s regulatory processes
“by conscripting the State’s officers directly.”
Printz struck down interim provisions of the Brady
Handgun Violence Protection Act that required state
and local law enforcement officers to conduct
background checks on prospective handgun
purchasers. In Printz, the Court noted: “The Federal
Government may neither issue directives
requiring the States to address particular
problems, nor command the States’ officers . . .
to administer or enforce a federal regulatory
program. It matters not whether policymaking is
involved, and no case-by-case weighing of the
burdens or benefits is necessary; such commands
are fundamentally incompatible with our
constitutional system of dual sovereignty.”

III. Murphy v. NCAA (2018):

In Murphy, Justice Samuel Alito, writing on behalf of

the Court, invalidated on anti-commandeering
grounds a provision in the Professional and Amateur
Sports Protection Act (PASPA) that prohibited
states from authorizing sports gambling
schemes.

Noting the rule from New York and Printz that

Congress lacks “the power to issue orders directly to
the States,” 33 the Court concluded that PASPA’s
prohibition of state authorization of sports gambling
violated the anti-commandeering rule by
putting state legislatures under the “direct
control of Congress.”

In so concluding, Justice Alito rejected the

argument that the anti-commandeering
doctrine only applies to “affirmative”
congressional commands, as opposed to when
 Congress prohibits certain state action. Both
types of commands equally intrude on state
sovereign interests.

Conspicuously absent from the list of powers

given to Congress is the power to issue direct
orders to the governments of the States. The
anticommandeering doctrine simply represents
the recognition of this limit on congressional
authority.

First, the Court noted that while cases

like Garcia, Baker, and Condon establish that the
anti-commandeering doctrine “does not apply when
Congress evenhandedly regulates activity in
which both States and private actors
engage,” 38 PASPA’s anti-authorization provision
was, in contrast, solely directed at the activities of
state legislatures.39 Second, the Court rejected the
argument that PASPA constituted a “valid
preemption provision” under the Supremacy
Clause.40 While acknowledging that the “language
used by Congress and this Court” with respect to
preemption is sometimes imprecise,41 Justice Alito
viewed “every form of preemption” to be based on a
federal law that regulates the conduct of private
actors—either by directly regulating private entities
or by conferring a federal right to be free from state
regulation.42 In contrast, PASPA’s anti-authorization
provision did not “confer any federal rights on
private actors interested in conducting sports
gambling operations” or “impose any federal
restrictions on private actors.” 43 As a result,
the Murphy Court viewed the challenged
provision to be a direct command to the states
in violation of the anti-commandeering rule.44

6. RESERVED/RESIDUARY POWERS DOCTRINE:

Tenth Amendment: The powers not delegated to the
United States by the Constitution, nor prohibited by it to
the States, are reserved to the States respectively, or
to the people.

I. McCulloch v. Maryland:

Marshall rejected the proffer of a Tenth

Amendment objection and offered instead an
expansive interpretation of the necessary and proper
clause6 to counter the argument. The counsel for the
State of Maryland cited fears of opponents of
ratification of the Constitution about the possible
swallowing up of states’ rights and referred to the
Tenth Amendment to allay these apprehensions, all
in support of his claim that the power to create
corporations was reserved by that amendment
to the states.7 Stressing the fact that the
amendment, unlike the cognate section of the
Articles of Confederation, omitted the word
“expressly” as a qualification of granted powers,
Marshall declared that its effect was to leave the
question “whether the particular power which
may become the subject of contest has been
delegated to the one government, or prohibited
to the other, to depend upon a fair construction
of the whole instrument.”8

II. New York v. United States:

Where, by a vote of six-to-two, the Court upheld the

right of the United States to tax the sale of
mineral waters taken from property owned by a
state. Speaking for four members of the Court,
Chief Justice Stone justified the tax on the
ground that “[t]he national taxing power would
be unduly curtailed if the State, by extending
its activities, could withdraw from it subjects of
 taxation traditionally within it.”13 Justices
Frankfurter and Rutledge found in the Tenth
Amendment “no restriction upon Congress to
include the States in levying a tax exacted equally
from private persons upon the same subject
matter.”14 Justices Douglas and Black dissented,
saying: “If the power of the Federal Government
to tax the States is conceded, the reserved
power of the States guaranteed by the Tenth
Amendment does not give them the
independence which they have always been
assumed to have.”15

III. United States v. Morrison:

Court while invalidating a provision of the Violence
Against Women Act (VAWA) that created a federal
cause of action for victims of gender-motivated
violence. Congress may not regulate “non-
economic, violent criminal conduct based solely
on that conduct’s aggregate effect on interstate
commerce,” the Court concluded. “[W]e can
think of no better example of the police power,
which the Founders denied the National
Government and reposed in the States, than the
suppression of violent crime and vindication of
its victims.”46
INTERGOVERNMENTAL RELATIONS
SEARCHING FOR STABLE SOLUTIONS, THE DESIGNERS of
federal systems focused on formal constitutional rules. Little
or no attention was given to the need for sub-constitutional
arrangements for intergovernmental coordination and
cooperation. Intergovernmental relations (IGR) as an
ongoing and mostly informal practice in federal systems
developed as a response to the much greater need for
coordination than was originally envisaged.
These intergovernmental relations predominantly operated
vertically, that is, between the central government and the
governments of the constituent units (individually or
collectively); however, they also may operate horizontally, that
is, between the constituent units themselves.
Intergovernmental relations generally involve a fluid
combination of conflict and cooperation. There is a competitive
predisposition in all federal systems— between the two levels
of government and among the member units. At the same time,
however, federal systems cannot survive without considerable
levels of cooperation.
I. UNITED STATES: COOPERATIVE FEDERALISM:
American federalism was originally designed as a dual, or as
Wheare put it, coordinate, system of government with the two
levels of government operating independently in their
respective spheres of responsibility. After years of gradually
moving in a more cooperative direction, it was
transformed after 1933 when congressional regulation
began to dominate intergovernmental relations under
the impact of New Deal legislation and economic
modernization.
By the end of the Second World War, and notwithstanding the
question of civil rights, the United States had evolved into a
homogeneous national state, and intergovernmental relations
almost entirely became subservient to the proliferation of
national programs emanating from Washington.
Consequently, intergovernmental relations developed
pragmatically into a giant machinery of program
delivery. At the core were the categorical grants-in-aid
discussed in Chapter 7—conditional financing programs
offered to states and local governments for specific
policy purposes deemed to be in the national interest.
From the mid-1960s onwards, Congress added to this by
greatly increasing its use of “preemption statutes”—laws
that used the constitution’s “supremacy clause” to pre-
empt or take over policy areas from the states or impose
requirements on them. American intergovernmental
relations, then, took on a top-heavy regulatory and at times
even outright coercive character, 22 despite much talk about a
new and more deregulatory as well as collaborative
federalism.
A. Grants/Aid to State and Local Governments:
There are more than 90,000 governments operating within its
boundaries: 1 national; 50 state; and the rest local, including
3,000 counties, 19,000 municipalities, 17,000 townships,
13,000 school districts, and 37,000 special districts for
particular purposes such as regional water management or
metropolitan transportation and transit.
In fact, when Americans talk about intergovernmental
relations, they have most in mind the vast array of grants-in-
aid on which state and local governments increasingly
have become dependent. As in all federal systems, cash
transfers initially played a modest role in American
governance. They began to grow rapidly in numbers and dollar
amounts during the twentieth century when Congress
assumed supremacy over such policy fields as welfare,
health, and highway construction. But it was not until the
1960s that they began to overshadow the entire system of
governance.
After 1980, the Reagan presidency proclaimed a new
federalism based on deregulation and budget-cutting. The
result was a consolidation into approximately 400 grants
programs to the tune of $100 billion, which amounted to a 13-
per-cent cut in federal transfers. To the extent that there
was change, it was not so much occasioned by a
commitment to a more balanced federalism in which the
states would become more significant intergovernmental
partners as it was driven by a neo-conservative agenda of
reduced public spending and the downloading of fiscal
responsibilities to lower levels of government.
Without the necessary financial commitment in the form of
grant money, the continuing regulation of whatever Congress
considered to be in the national interest put additional political
and administrative strains on state and local governments.
American intergovernmental relations focus primarily on
specific program delivery and not on fundamental issues
concerning the constitutional division of powers. Their
proliferation since the 1960s had a lot to do with a new federal
focus on local government that deliberately bypassed state
authorities. Intergovernmental relations therefore are more
centred on policy than politics. National policy regulation does
not immediately become a fundamental issue of power
encroachment.
B. Lobbying by State and Local Governments:
What is missing is intergovernmental ism from the input
side, the participation of the lower levels of government
in national policy formation. American federalism does
not accord to the state or local governments a place at
the federal bargaining table.
Instead, state and local governments have to rely on lobbying
like everyone else. Indeed, discussion of the representation of
state interests in Washington is often treated as simply a
subset of “interest group politics.” Coinciding with the
expansion of the grant system, a so-called intergovernmental
lobby established itself permanently in Washington. The five
largest lobby groups are the National Governors’
Association, the National Conference of State
Legislatures, the National League of Cities, the US
Conference of Mayors, and the National Association of
Counties. These organizations have permanent offices in
Washington, employing over 400 people, and spending some
$45 million annually—all with the overriding purpose of
influencing congressional grant legislation in their
favour. Not only must the states accept the same
outsider status as any other interest group in
Washington, but they do not even have any coherent
representation. Since the state governments are also
structured on the separation of powers principle, they are each
internally divided, further reducing any capacity for
horizontal IGR and coordinated representation.
The role of the states in the intergovernmental system is
further weakened by the functionally disjointed practice of
congressional policy-making. Specific funding programs are
the result of bargaining within and across a plethora of
special congressional subcommittees, and the process of
lobbying is left in the hands of policy specialists. A
general position toward the states is often not
discernible.
C. Waivers as a tool for Bargaining between States and
Centre:
Despite the pervasive image of American federalism as
“cooperative,” politically, American intergovernmental
relations have essentially remained in the original dual mould.
In comparison to most other federations, there is “very little
formal cooperation.” The bicameral Congress is still seen
as the exclusive provider of shared rule: “With the direct
election of US senators, there is no need for federal
legislators to listen or cater to the needs of state
legislators.”
Below the level of high politics, though, American federalism
involves a chronic requirement for cooperation.
Environmental regulation, for instance, involves both levels of
government in a complex and dynamic relationship. Most
broad Congressional acts contain provisions for flexible
implementation and administration in recognition of the
possibilities for diversity and experimentation across the
50 states. This in turn allows federal administrations to issue
so-called waivers whereby applicant states, localities, and
other organizations such as school districts or labour unions
can be exempted from some or all of the compliance
requirements of an Act when these are deemed too rigid.
Waivers have been used most extensively in the health
policy field, providing considerable scope for
experimentation with different program design across
the states. Recent administrations have also used waivers
more generally as a political weapon bypassing congressional
opposition or gridlock in order to promote their agendas.
President Clinton, for example, used waivers to expand
health-care coverage after his national health-care proposal
was defeated. President Obama has granted waivers to
several states when Congress would not act on untenable
compliance requirements under the No Child Left Behind
Act (e.g., standardized test scores, teacher
qualifications). Such waivers are “produced by
bargaining between federal and state executive branch
officials” and in this way can be interpreted as tools of a
“new executive federalism,” direct policy-making
interactions between the national and subnational levels
of government. They are regulatory tools based on
executive order, however, and as such they do not change
the overall picture of American intergovernmental
relations as one in which intergovernmental
collaboration in policy-making is largely absent.
II. EXECUTIVE FEDERALISM IN CANADA:

A. Factors for Rise of Executive Federalism in Canada:

As in other cases, the Canadian founders had not really paid
attention to inter-governmental relations. The idea was to
create a divided form of federalism characterized by
“watertight compartments.” There was to be little negotiation
or coordination, and jurisdictional disputes would be referred
to the courts.
In essence, this classical model of federalism endured until the
1950s, when federal initiatives led to the introduction of
a series of shared-cost programs in areas under
provincial jurisdiction, such as most prominently the
1957 Hospital Insurance and Diagnostic Services Act.
Even though they came with conditional strings attached,
these programs met with widespread provincial acceptance.
The conditions, usually in the form of an obligation to
maintain national program and delivery standards, were
looser than the American grants-in-aid. Additional revenue
facilitated the expansion of provincial bureaucracies. And
while the federal government could boast that it was
looking after the well-being of the national population,
the provinces were in charge of delivering the services
their citizens wanted.
Intergovernmental relations necessitated by these
developments by and large remained at the level of
consultation and policy coordination. By the 1960s,
however, calls became louder for a more political management
of intergovernmental relations, including economic,
financial, and constitutional matters. Québec first
established a separate Ministry of Intergovernmental
Affairs in 1961. The federal government followed suit
with a Federal–Provincial Relations Office in 1964. By
the early 1970s, such ministries of intergovernmental
relations existed in most, if not all, provinces. Canadian
executive federalism had become decidedly politicized.
This was possible because in all federal systems, the
executives of different governments are engaged in necessary
tasks of negotiating intergovernmental policy coordination. In
most federations, the relationship is somewhat lopsided,
though, because the national government ultimately calls the
shots due to a variety of factors, including the original
constitutional power allocation, its centralist interpretation by
the courts over time, superior fi scal capacity, and, more
generally, a united national citizenry.
1. Support of Judiciary and Jurisdiction over Resources: The
difference in Canada—apart from early judicial
interpretation in the opposite direction – is not only
 that national unity is more fragile than in the other
classical federations but also that provincial
governments aided by their “jurisdiction over
increasingly valuable resources” aggressively
engaged in political and administrative “province-
building.”

2. Weak Senate: According to one view, the deficient

construction of the Canadian Senate helps explain the
vigorous nature of executive federalism in Canada.
Because the provinces had no legitimate second-
chamber voice in national legislation, they had to
defend their interests through intergovernmental
muscle-flexing. This is the long-standing argument
about intrastate vs. inter state federalism in Canada.

3. Cultural asymmetry: As a permanent minority,

francophone Québec had never quite accepted the
constitutional settlement as fair and binding.
Transforming itself into a powerful provincial state during
the so-called Quiet Revolution in the 1960s, it was
Québec that first demanded constitutional change
reflecting the new reality. Such change could be brought
about only by intergovernmental agreement, because
Canada at the time did not have its own constitutional
amending formula (see Chapter 10). Against the rising
tide of Québec separatism, intergovernmental summitry
went into overdrive. Because of deeply competing visions,
however, the constitutional accommodation of Québec
ultimately failed.

B. Federal–Provincial Diplomacy:
Because of the political strength of the provinces,
intergovernmental relations in Canada developed into what
has been classically described as federal–provincial
diplomacy. At stake no longer were just issues of policy
coordination, or the establishment of specific shared-
cost programs, but much more fundamental questions
about rebalancing the federation.
In the Canadian case, intergovernmental relations can be
called “quasi-diplomatic” because, on the one hand, there is
a constitution that allocates powers to different levels of
government and a supreme court watching over the
exercise of these powers within legitimate constitutional
limits. Yet, on the other hand, the federal system
routinely came to rely on intergovernmental agreement
as if the provinces were sovereign entities (due to their
political power) alongside the national government.
Intergovernmentalism thus became a political game played out
among Canada’s first ministers.
C. First Ministers’ Conferences and Rise in
Intergovernmental Agreements:
It was Québec’s premier Jean Lesage who in 1960 not only
proposed to hold First Ministers’ Conferences (FMCs) as
annual events but also initiated the practice of annual
Premiers’ Conferences, which he thought were “necessary
and urgent” for the provinces to reach agreement on
“the large number of questions that divide them among
themselves and from the federal government.”
A new type of “summit federalism” began to take shape,
with all the parapher nalia of international conferences:
flags, government limousines, rolling cameras, and press
conferences after lengthy and often night-long meetings
behind closed doors. Yet all the orchestrated hype could
not prevent the eventual constitutional settlement of
1982 being concluded without Québec. After Trudeau’s
departure in 1984, a new and more reconciliatory
Conservative prime minister, Brian Mulroney, tried twice to
bring Québec into the constitutional fold, and twice he
actually managed to reach unanimous
intergovernmental agreement. Yet both agreements
failed during the ratification phase—by provincial
legislatures in the case of the 1987 Meech Lake Accord,
and by the people in a referendum follow ing the 1992
Charlottetown Accord.
It was this constitutional crisis that lastingly discredited
executive federalism, both in the public eye and among
scholars of federalism who argued that executive deals
behind closed doors suffered from an unacceptable
democratic deficit.
The practice of FMCs peaked during the same period
that saw the constitutional showdown between the
federal government and the provinces. While there had
been 19 FMCs between 1900 and 1959, the number rose
to 39 between 1959 and 1984. In 1985 alone there were
13 FMCs—although some of these involved only the
prime minister and one or several premiers. The number
of intergovernmental agreements “increased
exponentially” as well: in addition to major fi scal
transfers (see Chapter 7), there were 99 cost-sharing
agreements, 50 intergovernmental transfer agreements,
93 joint activities, and over 60 other arrangements.
Summit federalism declined during the 1990s, when FMCs
were downgraded to more informal FMMs (First Ministers’
Meetings). The period to date has only seen a few major new
agreements. One was the 1999 Social Union Framework
Agreement (SUFA), in which the federal government
promised provincial consultation prior to major federal
funding changes to existing federal–provincial programs
or new joint program initiatives. The agreement also
contained a general commitment of all governments to
collaboration, transparency, information sharing, and
dispute avoidance.
D. Premiers’ Conferences:
Parallel to the establishment of the Annual Premiers’
Conference, however, the decade saw a rather more
belligerent rise in regional interprovincial activity, with the
Council of Maritime Premiers being formed in 1972 and
the Western Premiers’ Conference in 1973.
This rise in regional interprovincial activity reflected the
fragmented nature of the Canadian federation. In east
and west, the federal government had long been seen as
dominated by central financial and manufacturing interests.
The increasingly singular focus of federal politics on the
containment of Québec separatism became another grievance.
While the fiscally transfer-dependent Atlantic provinces
had few means to take on the federal government
directly, the resource-rich West, led by Alberta, became a
powerful player in what essentially turned into a
triangular interest competition with Ottawa and Québec.
The protracted constitutional crisis of the 1980s reflected all
these regional concerns and grievances. By the time it was
over and the threat of Québec separatism appeared to subside
after the 1995 referendum, the focus of intergovernmental
relations had already shifted back to social policy.
Combatting a sluggish economy and a huge budget
deficit, the federal government administered drastic cuts
in transfer payments.
E. Council of the Federation:
Searching for a common response, and at the suggestion of the
Liberal—and therefore pro-federalist—premier of Québec, Jean
Charest, the 13 premiers of the provinces and territories
unanimously agreed in 2003 to transform the Annual Premiers’
Conference into a Council of the Federation. Meetings
were to be held twice a year and supported by a
permanent secretariat.
The newfound unity for the purpose of providing an
“integrated and coordinated approach to federal–
provincial relations” was successfully put to the test at the
FMM on the future of health care a year later. Confronted by a
united front of premiers and aided by an improving economy,
the new Liberal prime minister Paul Martin, who as finance
minister had administered the cuts, not only restored most
of the funding but committed to a 10-year plan of stable
funding under the 2004 Health Care Accord. The
ongoing operation of the Council of the Federation
shows that horizontal IGR has a meaningful presence in
Canadian federalism.
F. Confederal Canada:
So it would seem that the big picture of Canadian
intergovernmental relations is moving from a
predominantly vertical to a more significantly horizontal
dimension. Some even speak of a more “confederal”
Canada in which interprovincial self-coordination in
areas under provincial jurisdiction might take the place
of federal–provincial diplomacy.
Parallel emergence of a “beggar-thy-neighbour” federalism:
provincial premiers breaking ranks with their colleagues by
striking bilateral deals with the federal government when this
is to their advantage.
III. INTERLOCKING FEDERALISM IN GERMANY:
Informality is not what comes to mind first when thinking
about German federalism. If Canada is a case of “negotiated
constitutionalism,” as it has been suggested, then Germany is
one of “regulatory constitutionalism.” Nevertheless,
bureaucrats and politicians play an intense
intergovernmental role in the German federal system.
In the German case of integrated federalism, legislative joint
decision making is directly built into the system via the
Bundesrat. It is also required constitutionally for the so-called
joint tasks. And the system of administrative federalism
whereby the execution of federal legislation is entirely left to
the Länder brings with it a need for extensive self-coordination
at the Länder level.
The result has been called a “labyrinthine structure of joint
standing conferences, committees and working groups.”
Because this structure has increasingly been seen as
inefficient and lacking legitimacy, efforts have been made
by the premiers of the Länder in recent years to cut down on
the number of committees and working groups and thus to
reduce the dominant influence of “technocrats” and policy
specialists. The German intergovernmental machinery
nevertheless is probably still the most intertwined or, as
the German jargon goes, inter locked, of all major
federations.
Reasons for Interlocked nature of Federalism: The Quest for
Policy Harmonization:
1. Horizontal Self-Coordination (to achieve Policy
Harmonization): Since the Länder are in charge of
policy implementation and administration, the federal
government needs their expertise at the stage of
policy formulation. By the same token, most federal
legislation is general in the sense that it leaves
considerable room for policy design and execution
at the Länder level, and there is also no federal
administrative bureaucracy that would perform a
coordinative task of policy harmonization across
Länder boundaries through vertical channels of
intergovernmental cooperation, as we have seen in the
American and Canadian cases. Thus, the Länder
themselves have to organize this harmonization through
horizontal self-coordination.

Major cooperative endeavours such as tax sharing,

fiscal equalization, and more recently the joint tasks
are not left to intergovernmental agreement but are
instead enshrined in national or even constitutional
law. In a largely homogeneous society, there has been
little room for the proposition that federalism should
permit the subnational units to act as laboratories for
social experimentation. Hence even in policy fields
where the Länder have exclusive jurisdiction—
notably education and culture—coordination has
been paramount.

2. Coalition Governments (requiring negotiations for

Policy Harmonization): A final reason for the
interlocked nature of German intergovernmental relations
is the party system. On the one hand, it is a highly
centralized national party system, which means that the
process of intergovernmental negotiation and
coordination is to a large extent driven by party politics
across jurisdictional boundaries. On the other hand,
due to a proportional electoral system, German
 governments at both levels are almost without exception
coalition governments. This means that both the
approval of federal legislation in the Bundesrat and policy
coordination at the Länder level require intense
negotiation in order to find agreement across partisan
lines.
Vertical Cooperation:
1. Between Federal Chancellor and Premiers: Even after
the 2006 constitutional reforms, the Länder governments
still co-determine about 40 to 50 per cent of all federal
legislation via the Bundesrat. The German second
chamber’s construction as a council must not be confused
with intergovernmental relations or executive federalism,
however. The Länder delegates in the Bundesrat act
as legislators and interact with the elected members
of the parliamentary first chamber, the Bundestag.

Vertical cooperation between the federal chancellor

( Bundeskanzler ) and the premiers ( Ministerpräsidenten
) of the Länder is regulated as well. Article 65 of the
Basic Law determines that the “Federal Chancellor shall
conduct the proceedings of the Federal Government with
rules of procedure adopted by the Government and
approved by the Federal President.” First adopted in
1951, these rules of procedure stipulate in
paragraph 31 that the chancellor shall invite the
Ministerpräsidenten (premiers) “personally and
several times a year” in order to discuss “important
political, economic, social and financial questions”
as well as to work toward a “uniformly shared
understanding of politics” at both levels of
government.

Only once the Social Democrats first formed the federal

government in the late 1960s did these meetings of
Germany’s first ministers become regularized and
inclusive. Even though they are no more than
consultative in nature, they are now carefully
 planned and prepared by senior staff. On occasion
they can also result in a more substantive outcome. This
was the case in 1993, for instance, when agreement was
first reached on the so-called solidarity pact—joint
transfer payments to the new and poorer eastern
German Länder —before it was then formally approved
by a legislative compromise between the governing
conservatives and the Social Democratic opposition
holding the majority of votes in the Bundesrat.

2. Ministerial Level Councils: Apart from this first

ministers’ summitry, intergovernmental relations in
Germany are also regularized at the ministerial
level. Since the late 1960s there has been a Council for
Fiscal Planning and a Council for Economic
Development coordinating budgetary planning and
public borrowing. As part of a 2009 constitutional fiscal
reform package Council for Stability was established in
2010.
Länder Cooperation in Federal Legislation:
Much more important for the functioning of the
federal system are the negotiations that accompany
specific legislative initiatives requiring bicameral
approval. This is where the “technocrats” come into play.
The relevant departments at both levels of government
scrutinize a proposed bill for compatibility with
principles and practices of Länder administration.
Once a bill is before the Bundesrat, a “two-level process”
kicks in: the committees of the Bundesrat as well as the
Länder ministries and cabinets try to negotiate a
common position. This is where party politics comes into
play. Committee work in the Bundesrat is prepared by
separate working groups that parallel the government–
opposition divide in the Bundestag. But because the Länder
are increasingly governed by party coalitions cutting across
this divide, and because these governments tend to abstain
from voting and abstentions are counted as negative votes,
the approval of bills has become more difficult as it requires
a de facto absolute majority of votes cast.
Joint Tasks:
Germans went a step further by constitutionally
enshrining joint decision making in areas under
Länder jurisdiction deemed to require federal financial
support: regional development, agriculture, and, until
the 2006 reforms, post-secondary education. In
essence, these joint tasks are about intergovernmental
planning and shared-cost financing. As such, they constitute
a unique form of intergovernmentalism. Other than in the
case of conventional intergovernmental agreements,
which require unanimity, joint decision-making in
these policy fields falls to planning committees
endowed with a qualified majority rule procedure by
which the national government has as many votes as the
Länder taken together. Unanimity prevails in most
instances, however, because the Länder governments
have a collective interest in benefiting from federal
grant money. Still, the united front has shown cracks in
recent years. While richer Länder have financed projects
such as university construction on their own when the joint
framework plans did not accord them priority, poorer
Länder had to forgo federal money they were entitled to
because their own budgetary situation did not allow co-
financing. It is not least for this reason that postsecondary
education was taken off the list of joint tasks in 2006. The
joint tasks have been widely criticized as a form of vertical
executive power collusion undermining the autonomy of the
Länder parliaments in particular. Moreover, they have
famously been characterized as a “joint-decision trap”
whereby necessary policy decisions are frustrated by
the vested interests of too many participants.
Länder Self-Coordination:
Länder premiers and cabinet ministers have met regularly
in conferences ever since, and their federal counterparts are
sometimes invited to participate. As in the Canadian case,
 these conferences have no constitutional basis. They are,
however, well regulated by formal rules, standing orders or
resolutions, and they are well supported by the Länder
bureaucracies.
Only one of these conferences, the Permanent Conference
of the Ministers for Cultural and Educational Affairs
(Ständige Kultursministerkonferenz, KMK) has its own
bureaucracy, including a secretariat employing more than
200 civil servants. The KMK is “permanent” in the sense
that its work is ongoing by means of some 36
commissions, sub-commissions, and working groups in
which the federal government may participate as well.
Länder self-coordination for the purpose of policy
harmonization developed, therefore, as a pre-emptive
strategy against possible federal encroachment in the name
of equitability. By all counts, however, the battle against
federal encroachment has not been very successful. It is
difficult to deny the national government a leading role
when the goal is harmonization rather than differentiation.
IV. IGR IN INDIA:

Intergovernmental Relations in India have been by and large

an affair of "executive federalism" rather than "legislative
federalism" which, via Rajya Sabha, never got off the ground.
At the same time, there has been no serious effort to reinvent
this House as a truly federal second chamber.
The mechanisms of intergovernmental relations cannot
entirely be a matter of only formal constitutional
provisions in any country. For the relations of such
magnitude and contingencies are not amenable to
envisioning and regulating through a rigid legalistic
process.
The governments of India have displayed different approaches
at different points in time with regard to Article 263 of the
Constitution providing for the establishment of an Inter-
State Council (ISC) in case it appears to the President that
such a body would facilitate public interests as well as
promote harmonious intergovernmental relations. From
1950 to 1990, the first five Prime Ministers did not form the
Inter-State Council under this constitutional mandate and
preferred to make do with non-constitutional bodies like the
National Development Council (NDC) or ad hoc
intergovernmental conferences like Chief Ministers'/
Ministers'/ Secretaries' conferences.
It was in the 1990 that Inter-State Council was set up by
the first coalition government in New Delhi formed by a
group of non-Congress parties who called themselves the
National Front (NF) under the Prime Ministership of
Janata Dal's [Link].
MAJOR INTERGOVERNMENTAL RELATIONS (IGR) FORUMS:
It can be said that apart from the (1) first degree of
constitutional formality under which ISC was established
under Article 263, there is a (2) second degree of
institutional formality, namely, parliamentary
enactments by which such bodies are set up, e.g. Zonal
Councils. (3) The third degree of institutional formality
characterizing such bodies are set up by a cabinet
resolution e.g. the National Development Council (NDC). It
would appear that going by the norms of the federal executive
as designed by the constitution, the most proper way of setting
up such a body would be either a presidential order on the
advice of the cabinet in consultation with the state
governments or a parliamentary enactment in
consultation with state governments assented to by the
President. A cabinet resolution in the matter would appear to
be a fait accompli which may pass off under the pretext of
conventions of the constitution which are not strictly codified.
Informal intergovernmental mechanisms on the initiatives of
the union or state governments are not strictly
unconstitutional, but they are certainly extra-constitutional.
They may be justified under the exigencies of an emergent
situation as ad hoc steps with mutual consent between
the two orders of the government. Examples of such
mechanisms are the Chief Ministers' Conferences, Ministers'
Conferences and Secretaries' conferences. Besides, there is
another category of informal conferences representing
parliamentary and executive functionaries not
necessarily representing their government like
Speakers'/ Governors'/ Presidents' conferences.
MEMBERSHIP, AUTONOMY, REPRESENTATION OF INTERESTS AND
DECISION-MAKING:
THREE MEETINGS:

1. Inter-State Council & National Development Councils

2. Zonal Councils
3. Chief Ministers' Conferences, Ministerial conferences,
Secretaries' conferences
The ISC and the NDC have overlapping membership in that
these two bodies include the Prime Minister and some key
Union Ministers, Chief Ministers of States and effective
executive heads of the Union Territories. In case of the
NDC, the Deputy Chairman of the Planning Commission is also
a member. The NDC was set up to review and finalize the
National Plan made by the Planning Commission and to
look into the question of socio-economic policies
affecting national development.
The Prime Minister/ Chief Ministers' Conferences, Ministerial
conferences, Secretaries' conferences are self-defining in as
much as they respectively include the First Ministers,
Ministers and officials from the two orders of the union and
state governments. They are chaired by the Prime Minister or
respective union ministers or union officials to coordinate
policies of two levels of the government.
The five Zonal Councils set up under the States'
Reorganization Act, 1956, are high level advisory bodies
comprising chief ministers of states in that zone, development
ministers and chief secretaries of these states, and a member
of the Planning Commission. Each Zonal Council is headed
by the union home minister. Its purpose is to provide a
common meeting ground in each zone for ensuring
resolution of inter-state problems, fostering balanced
regional development and building harmonious union-
state relations. The Zonal Councils are the sole IGR
mechanism for regional or territorial development. It was
hoped that these bodies would serve as a mechanism of
decentralization at the intermediate level below the Centre
and above the States. However, their performance is
marred by irregular meetings and negligible
achievements mainly due to apathy of an overburdened
union government and fractious states in a region. The
only exception is the North-Eastern Council that has
notable record of activities and performance.
If the union's proposal affects certain states badly, they
come more prepared to put forward their points of view
and oppose the proposal so made. If the policy affects a
group of states, they unite against the Centre. For
example, in a discussion on Article 356 providing for central
intervention in a State government in crisis situation, the
States that are politically more vulnerable to such pressures
on account of being under the rule of party other than that in
power in New Delhi are more likely to take a reformist/
abolitionist view.
However, at the end of the day, all different points of views are
taken into account in fabricating a consensus or a draft which
would satisfy most or all. "A lowest common denominator is
aimed at which protects the interests of the state governments
and also promotes the objectives of the Union government".
For instance, the latest meeting of the ISC in Srinagar in
August, 2003 was reported to have 'unanimously' decided to
amend Article 356 to incorporate safeguards for protecting
autonomy of the States as suggested by the Sarkaria
Commission as well as ruled by the Supreme Court in
[Link] vs. Union of India (1994). But the press also
reported at least two chief ministers – those of Punjab
and Tamil Nadu – speaking from Chandigarh and
Chennai that it would be more desirable if Article 356
was deleted from the constitution.
The NDC has been mainly used for facilitating the process of
planning involving the two orders of government and for the
approval of the Plan document by the executive heads of the
Union and State governments. The State governments
submit their five-year plans and annual plans to the
Planning Commission which prepares a National Plan
after discussion with delegations from State
governments consisting of Chief Ministers and relevant
Ministers and Secretaries. The Planning Commission
draft is then discussed and approved by the Union
government. The revised/ unrevised draft is then finally
presented to a meeting of the NDC for
intergovernmental approval. (There are negotiations
that happen with state governments behind the scenes
before submitting for approval.
In an NDC meeting, all come with prepared speeches which is
circulated in the meeting so there is hardly any interactive
discussion. The State governments have also at times
complained that the agenda papers are sent late to them that
doesn't allow them time for home work. It would appear that
both in the case of the ISC and the NDC the leeway for a
largely open-ended negotiations or discussion is somewhat
limited because of the given structures of the constitution and
the planned documents with certain inbuilt technicalities.
It is probably for this reason that ministerial and
secretaries’ meetings involving the two orders of the
government are more open and interactive. Many feel that the
real nitty-gritty of intergovernmental relations are conducted
in these forums. An official version describes that these
meetings are usually convened by the union ministry
concerned. The agenda is set by them, if the concerned
ministry from a State government wants some specific
item to be included in the agenda, they can do so. The
meeting is chaired by the concerned Union Minister/
Secretary. All ministers/ Secretaries from big or small
States are given adequate time to express their views. In
need of more time, the meeting is extended to more than
a day. The decision is not by voting. The delegates
negotiate and bargain and try to convince each other
and the proceedings are recorded. The final decision is
based on a draft that reflects a consensus on which all
delegates would agree.
Implementation and follow-up Action:
In this regard, the performance of ISC has been abysmal.
There has hardly been any constitutional amendment or
parliamentary enactment in pursuance of the
recommendations made by the ISC so far as the political
institutional dimension is concerned. For example, the
Sarkaria Commission Report had recommended constitutional
entrenchment of the NDC and Planning Commission and for
making Finance Commission a permanent body. None of these
recommendations have been carried out through a
constitutional amendment.
As far as the NDC is concerned, there is hardly any follow up
at the political level until the next NDC but the Planning
Commission goes through the motions of periodical reviews of
the Plan in relation to both the Union and State governments.
In case of Ministerial and Secretaries conferences, once
the decision is taken, it is left to the parties concerned
to implement the decisions. By the time of the next
meeting, everyone becomes more alert and take stock of the
progress made in the implementation. When they finally meet,
they discuss and share their stock taking, however, there is no
centralized monitoring.
NITI AAYOG: (CREATED THROUGH CABINET BODY RES.)
The NITI Aayog was formed on January 1, 2015. In Sanskrit,
the word “NITI” means morality, behaviour, guidance, etc. But,
in the present context, it means policy and the NITI stands
for “National Institution for Transforming India”. It is the
country’s premier policy-making institution that is expected to
bolster the economic growth of the country. It aims to
construct a strong state that will help to create a dynamic and
strong nation. This helps India to emerge as a major economy
in the world. The NITI Aayog’s creation has two hubs
called “Team India Hub” and “Knowledge and Innovation
Hub”.
1. Team India: It leads to the participation of Indian states
with the central government.
2. The Knowledge and Innovation Hub: it builds the
institution’s think tank capabilities.
Objectives of NITI Aayog
1. The active participation of States in the light of
national objectives and to provide a framework ‘national
agenda’.
2. To promote cooperative federalism through well-
ordered support initiatives and mechanisms with the
States on an uninterrupted basis.
3. To construct methods to formulate a reliable strategy at
the village level and aggregate these gradually at
higher levels of government.
4. To propose strategic and long-term policy and
programme frameworks and initiatives, and review
their progress and their effectiveness.
5. To effectively screen and assess the implementation of
programmes and initiatives, including the identification
of the needed resources to strengthen the likelihood of
success.
Composition includes Prime Minister as
Chairperson, and a Governing Council consists of
the Chief Ministers of all the States and Lt.
Governors of Union Territories in India, etc
GST COUNCIL:
The 101st Amendment Act of 2016 paved the way for the
introduction of a new tax regime (i.e. goods and services tax –
GST) in the country. The smooth and efficient administration of
this tax requires cooperation and coordination between the
centre and the states. The amendment inserted a new Article
279-A in the Constitution of India. This article empowered the
President to constitute a GST Council by an order.
While discharging its functions, the Council is to be guided by
the need for a harmonised structure of GST and the
development of a harmonised national market for goods and
services. Vision: To establish the highest standards of the
cooperative federation in the functioning of the Council, which
is the first constitutional federal body vested with powers to
take all major decisions relating to GST.
The Council is a joint forum of the centre and the states and
consists of the following members:
1. The Union Finance Minister as the Chairperson
2. The Union Minister of State in-charge of Revenue or
Finance
3. The Minister in-charge of Finance or Taxation or any
other Minister nominated by each state government
Functions of the Goods and Services Tax Council
The Council is required to make recommendations to the
centre and the states on the following matters:
1. The taxes, cesses and surcharges levied by the centre, the
states and the local bodies that would be merged
in GST.
2. The goods and services that may be subjected to GST or
exempted from GST.
3. Model GST Laws, principles of levy, apportionment of
GST levied on supplies in the course of inter-state trade
or commerce and the principles that govern the place of
supply.
4. The threshold limit of turnover below which goods and
services may be exempted from GST.
5. The rates include floor rates with bands of GST.
 GERMAN MEDIATION COMMITTEE
A. MEMBERS:

Each federal state has a seat on the committee, while

the other half of the committee is made up of
representatives from the Bundestag; the seats are
distributed among the parties represented in
the Bundestag as a function of the relative size of the
various parliamentary groups. As there are 16 federal
states, the committee comprises 32 members.

A substitute is nominated for each member, who may

however only attend meetings should the member they
represent be unable to attend. This is to ensure that the
number of participants at meetings is kept small. Each
parliamentary group or federal state may choose a new
representative at most four times in each Bundestag term.

The meetings are strictly confidential. The two chairs,

one a member of the Bundesrat, the other a member
of the Bundestag, take turns in chairing the meetings
during a three-month period and may stand in for each
other if necessary.

B. THE MEDIATION PROCESS:

None of the members of this committee are bound by

instructions. It would however be unrealistic to assume
they would not take the (party) political balance of
power into account, for the Mediation Committee is
only successful if the Bundestag and
the Bundesrat ultimately accept its proposals.

The committee may only act on the basis of a request

from the Bundesrat, the Bundestag or the Federal
Government to address a specific bill. Given the way in
which legislative procedure is structured, the Bundesrat is
of course the main source of such requests.
 The Bundesrat may request a meeting of the
Mediation Committee for all bills adopted by
the Bundestag. The Bundestag or the Federal Government
may only convene the Mediation Committee if
the Bundesrat has not expressed approval of a consent bill.
Three mediation processes may be held in succession
for this category of legislation. That is however the
upper limit, as each constitutional body is only
authorised to make one request per bill that the
Mediation Committee meet.

C. RESULTS OF MEDIATION:

Mediation Committee decisions are taken on a majority

basis. This means that a committee decision, known as a
compromise proposal, does not require unanimous
backing from all committee members.

In accordance with the rules of procedure, the mediation

process can lead to four different outcomes:

 The Committee may recommend that a bill passed by

the Bundestag be revised, i.e. that provisions not
acceptable to the Bundesrat be reformulated, that
additions be made, or that parts be deleted.
 A bill passed by the Bundestag may be confirmed. In
this case draft amendments submitted by
the Bundesrat are rejected.
 The proposal may be made that the Bundestag repeal
the bill in question. This happens when
the Bundesrat rejects a bill in its entirety and is
successful in having this accepted by the Mediation
Committee.
 Mediation Committee proceedings may be concluded
without the submission of a compromise proposal.
This happens, for instance, when no majority decision can
be reached in the committee.
The Mediation Committee may only make proposals to
resolve differences of opinion between
the Bundestag and the Bundesrat, but is not empowered
to adopt bills itself. It is not a "super-parliament".
THE FEDERAL SYSTEM OF THE FEDERAL REPUBLIC OF
GERMANY

Under constitutional law, the Federal Republic of Germany

is a federal state with 16 Länder forming its constituent
states. Both the constituent states and the nation have their
own original sovereign authority. The constituent states
are not provinces or departments but states with their
own Land constitution, parliaments and administrative
structures. The exercise of sovereign power is split
between the Federation and the Länder by the Basic
Law. In this process, the Basic Law assumes that the
Länder are generally competent (Art. 30, 70, 83 of the
Basic Law). In the fields of legislation, administration and
jurisdiction, the Federation has its own competencies only
if the Basic Law explicitly assigns such competencies to
it, or if unwritten competence can be derived by way of
interpreting the Constitution.

Responsibility for legislative process lies predominantly

with the Federation:

In constitutional reality, the Federation dominates

legislation, while the Länder dominate administration.
This is in line with practical requirements. In the
administrative area, decentralised decision-making is
best able to accommodate differing circumstances and
conditions in many walks of life. Because many
situations in life cannot be regulated properly by
legislation at the local or regional orders alone, a
trend towards harmonisation is occurring in the field
of lawmaking both in the national and supranational
arenas. This applies in particular to the necessary
harmonisation of law within the European Community.
Accordingly, the Federation has been making full use
also of its merely optional legislative powers
(concurrent legislative power of the Federation
pursuant to Articles 72, 74, 74a of the Basic Law and
framework legislation pursuant to Article 75 of the
Basic Law). The result is that the constituent states’
scope for legislation has been restricted.

The most important legislative competencies, which have

remained with the Länder in practice, include cultural
questions, school and university education law,
broadcasting law, building regulations law and general
police and regulatory law.

Responsibility for administrative process lies predominantly

with the Länder:

In the field of administration, the picture is a different one.

The Länder not only execute their own Land laws, but
also the vast majority of federal legislation. It is in
only a very few sector-specific fields that the
Federation has direct administrative responsibility.
These fields include for instance the Foreign Office, the
Federal Army Administration, the Federal Border
Police and specialised central federal authorities such
as the Federal Criminal Police Office or the Federal
Office for the Protection of the Constitution.

How the Länder contribute to federal legislation through

the Bundesrat:

Even though legislative authority is predominantly with the

Federation, and the Länder have limited scope to enact
legislation, the latter can exert a strong influence on federal
legislation through the Bundesrat. The Länder are
entitled to introduce bills in the Bundesrat. The
Federation’s legislative process provides that the
Bundesrat must be heard with regard to all federal
laws considered by the Bundestag. The Länder can also
influence the content of federal legislation through the
exercise of their absolute or suspensive veto. The nature of
the veto is dependent on the type of legislation under
consideration. The Basic Law provides for a conflict
resolution mechanism between the Bundestag and the
Bundesrat in the so-called Mediation Committee.

Fiscal federalism within the Federal Republic of Germany:

The Federation and the Länder can only act independently

and efficiently in political terms, if they have sufficient
finance. Under the constitutional provisions of the Basic
Law governing state finance, the Federation and the
Länder each bear the respective costs incurred by
them in the performance of their functions.

Since the Länder basically have to execute federal

legislation as their own affairs, alongside their Land-specific
laws, they also have to bear the costs associated with these
functions. By the division of authority over tax legislation
between the Federation and the Länder, the Bundesrat’s
rights of participation in tax legislation, and the standards
set for the distribution of tax earnings, the Basic Law
guarantees that the Federation and the Länder have the
necessary funds to discharge their tasks.

This is ensured through a balanced system of tax

legislation, adjustment of tax authority as a result of
changing conditions, as well as through the
entitlement of the Federation and the Länder to tax
revenue. The tax legislation competencies and the
entitlement to tax revenue on the part of the Federation and
the Länder are supplemented through regulations on
revenue equalization.

Revenue equalization works:

• vertically, between the Federation and the Länder
• horizontally, between the Länder,

to equalize differences in economic and financial capacities

within the federal territory. Furthermore, the Federation
may grant the Länder financial assistance for particular
investments by the Länder or by municipalities, provided
that such investments are necessary to avert a disturbance
of the overall economic equilibrium, to equalise
differing economic capacities within the federal
territory, or to promote economic growth. The
regulations adopted to achieve this end reflect a particularly
high degree of co-operation, co-ordination and solidarity in
the federal state. The regulations are also a crucial
prerequisite and guarantor of the approximation of
living standards between the eastern and western
Länder after the reunification of the two Germanys in
1990.

The Federation and the Länder act together in the field of

federal legislation:

The Basic Law and the Rules of Procedure of the

Bundestag, Bundesrat and the Federal Government
regulate in depth to what extent the Länder are
involved in federal legislation.

I. Pre-Negotiations: Furthermore, legislative proposals

are thoroughly discussed between the Federation and
the Länder before draft laws are submitted to
parliament. The Land Governments are involved
early in the process of drafting Federal
Government bills. Thus, they are in a position to
influence decisively the content of bills before the
legislation is submitted to parliament. At the same
time, early involvement of the Land Governments
enables the Federal Government to remove potential
conflicts before the cabinet decides on the draft law.

II. Introduction in Bundestrat (First Passage): After

involvement of the cabinet, the Federal Government
bill is submitted to the Bundesrat, the chamber of the
Federal Länder, for the so-called first passage. The
Bundesrat is entitled to make comments on the draft
law, to which the Federal Government may respond.
 In this context, the Bundesrat acts as the second
legislative chamber of the Länder and must be
involved in approving all legislation. As already
noted, the Länder are entitled to introduce
legislation in the Bundesrat and to influence the
content of federal laws by withholding their
consent.

III. Forwarde
d to Bundestag: After that, the draft law, together
with the comments by the Bundesrat and any response
by the Federal Government, is forwarded to the
Bundestag as the decisive legislative body.

[Link] to Bundestrat (Second Passage): When

the Bundestag has decided on the draft law, it is
forwarded the Bundesrat for the second passage.

V. Mediation: If the Bundesrat and the Bundestag

disagree, a convening of the Mediation
Committee may be called for. The Mediation
Committee consists of members from both the
Bundestag and Bundesrat. If and when legislative
proposals require Bundesrat consent in accordance
with the Basic Law, the Bundesrat may refuse to give
its consent. If it does, the draft law “has failed”.
The number of bills requiring Bundesrat consent is
considerable, because it includes all legislation regarding
the establishment of authorities or regarding Länder
administration. The Länder can bring their influence to bear
at several stages of the legislative process, which means that
the Federation greatly depends on finding a consensus. The
Federation must work to find the necessary majorities in the
Bundesrat. It is difficult to push through legislation
against the will of the majority of Länder.
Political consultation and co-ordination:
1. Between the Federal Chancellery and the Bundesrat:
 A Minister of State on the level of a Parliamentary State
Secretary has been entrusted with this task for many
years at the Federal Chancellery. His main point of
contact at the Bundesrat is its Consultative Council,
which is composed of the 16 Land plenipotentiaries
representing Land interests vis-à-vis the Federation.
As a rule, this body meets with the Minister of State
at the Federal Chancellery on a weekly basis. They
primarily come together to prepare Bundesrat meetings.
They also discuss on a confidential basis, all other issues
requiring co-ordination between the Federation and the
Länder.

2. In the Conference of Minister-Presidents:

The Conference of Minister-Presidents meets at

least twice a year. The Federal Chancellor is a
participant in the Conference. There are also conferences
of specialised ministers of the Federation and the
Länder, which are also convened at least once every six
months. The preparation for the Conference of Minister-
Presidents is done by the heads of the state chancelleries
and senate chancelleries and the head of the Federal
Chancellery, who generally meet one week prior to a
meeting. The same applies to the conferences of
specialised ministers. In these cases, the state secretaries
of all ministries concerned at the Land and federal level
also meet one week before the conferences actually take
place. In practice, both the Conference of Minister
Presidents and the conferences of specialised
ministers are very important, because they make
political decisions - in general solely on the basis of
unanimity - which are binding on all parties.

3. Land-based parliamentary groups of the Bundestag:

The political importance of the Land-based

parliamentary groups of the Bundestag cannot be
 overlooked, either. They prepare the negotiations of
the working group and parliamentary group meetings,
thus ensuring that the views and weight of the individual
Land associations and Land governments are brought to
bear in the parliamentary negotiations and decisions.
The Federal Constitutional Court as the guardian of
federalism:
Finally, the Federal Constitutional Court is of particular
importance when it comes to preserving the federal state
structure. The Länder may turn to this Court whenever they
feel that their rights or competencies are impaired in breach of
the constitution. The Federation, too, may turn to the Federal
Constitutional Court, when it feels that a Land law is
unconstitutional. In these cases, the Federal
Constitutional Court hands down final decisions binding
on all those concerned.
The two legislative bodies of the German federation:
The German constitution, provides for two ‘legislative bodies’:
the Bundestag (First Chamber) and the Bundesrat (Second
Chamber). While the Bundestag is the main legislative
body whose primary task is to adopt bills, the
Bundesrat’s task as a legislative body is either to give or
to refuse its consent or – depending on the
constitutional arrangement – to object to the bill in question
if necessary. Thus, bills are not jointly adopted by the
Bundestag and the Bundesrat but by the Bundestag alone
with, however, different forms of participation of the
Bundesrat.
Depending on the constitutionally stipulated form of
participation of the Bundesrat in the law-making procedure –
either a necessity for consent or the possibility to object
to a bill – the political composition of the Bundesrat may
become important.

However, compared to the Bundestag, the Bundesrat is still an

institution that is dominated by administrative expertise rather
than by political debate (Sturm 2009: 147). The reason for
this is the composition of the Bundesrat, which consists
of members of the Land governments, which are not
necessarily – and are often not – composed in the same way as
the federal government or the majority in the Bundestag.
Rather, depending on the outcome of the Land elections, the
Bundesrat may form a forum for the federal opposition.
Bundestag is directly elected by German people.