The 1987 Proposal

1. As mentioned in Chapter 2, the changes to the amending formula proposed by the Constitution Amendment, 1987 are two in number. 
(a) Certain matters, which are now subject to amendment under the seven-province formula, would become subject to amendment only with the unanimous consent of all governments--namely, representation in the House of Commons, the powers of the Senate and the method of selecting Senators, representation in the Senate and the residence qualifications of Senators, the Supreme Court of Canada (other than the composition of the Court), the extension of existing provinces into the territories and the establishment of new provinces. 
(b) The right to compensation for amendments resulting in a transfer of legislative powers from the provinces to the federal government would be broadened. The principle of compensation for a refusal to agree to such a transfer of power to the federal government was established in 1982. But in 1982, compensation was restricted to transfers in respect of "education or other cultural matters". The 1987 Accord would guarantee compensation to a province that opts out in respect of a transfer of any legislative powers. 

The Existing Amendment Procedures

2. The present Constitution of Canada contains not one but five amending formulae. 
First, section 38 of the Constitution of Canada sets out the general amending formula for changes to the Constitution. This formula requires the approval of the Senate and House of Commons and of the legislative assemblies of at least twothirds of the provinces with at least 50% of the population of all provinces. The twothirds 50% formula [colloquially referred to as the 750 formula] at present requires the approval of 7 provinces, representing at least 50% of the population of all the provinces. Among the features of the Constitution that may be changed in accordance with the 7-50 formula is perhaps the most important element in it, namely, the distribution of legislative powers between Parliament and the provincial legislatures. This is the very substance of the federation.

Second, the Constitution of Canada then sets out other amending formulae, all of which are exceptions to the 750 formula. Section 41, which applies to a limited number of matters, requires the unanimous consent of the Senate and House of Commons and the legislative assembly of each province. The matters requiring unanimous consent are the following:

(a) the office of the Queen, the Governor General and the Lieutenant Governor of a province; 
(b) the right of a province to a number of members in the House of Commons not less than the number of Senators by which the province is entitled to be represented at the time this Part comes into force; 
(c) subject to section 43, the use of the English or the French language; 
(d) the composition of the Supreme Court of Canada; and 
(e) an amendment to this Part. 

Third, another exception to the 750 formula is found in section 43 and concerns any provision that "applies to one or more but not all, provinces", including alterations to boundaries between provinces and language within a province. Amendments in respect of these matters require the consent of the Senate and House of Commons and the legislative assembly of each province to which the amendment applies.

Fourth, section 44 of the Constitution Act, 1982 authorizes amendments to the Constitution of Canada in relation to the executive government of Canada or the Senate and House of Commons, other than those matters referred to in sections 41 and 42 of the Constitution Act, 1982. The amendments authorized by section 44 are within the exclusive power of the Parliament of Canada. 
Fifth, and the last exception to the 750 general amending formula, is to be found in section 45 of the Constitution Act, 1982. This provision empowers the legislature of each province exclusively to make laws amending the constitution of that province. This amending formula, like the formula set out in section 44, discussed above, must be read subject to section 41 of the Constitution Act, 1982--the unanimous consent formula. 

Consideration of Changes Proposed by the 1987 Accord

3. The first point to be made is that the Constitution Amendment, 1987 will leave unchanged the general 750 formula. Most amendments to the Constitution of Canada, including those that would bring about a change in the distribution of powers, will continue to require only the approval of the House of Commons and the Senate and at least twothirds of the provinces having at least 50% of the population of all the provinces. 
(a) Compensation for optingout

4. The only change in the proposed Constitution Amendment, 1987 that would affect the 750 formula is in section 40, which now requires reasonable compensation only for those constitutional amendments that result in a transfer to Parliament of provincial legislative powers relating to education or other cultural matters. The amended section 40 would require reasonable compensation for any constitutional amendment that transfers any exclusive provincial legislative power to the Parliament of Canada that a particular province rejects.

5. It has been suggested to us that this change will have limited practical application. It presupposes, in the first place, that seven provinces representing at least 50 per cent of the population of all the provinces decide to transfer to Ottawa a field of exclusive provincial jurisdiction. To meet the population requirement, at present either Quebec or Ontario would likely have to support the transfer. It is not easy to think of an area of exclusive provincial jurisdiction that Quebec or Ontario would be willing to vacate. If the sevenprovince amending formula is not satisfied, the amendment fails and section 40 does not apply.

6. It has been suggested that this provision encourages the "balkanization" of Canada. But this criticism is clearly wrong. Whatever "balkanization" exists was created in 1867 when the area of legislative competence was assigned to exclusive provincial jurisdiction. What is contemplated is a situation in which at least seven provinces, but not all, wish to "debalkanize" the power by transfering it to Ottawa, thereby creating greater centralization in the hands of the federal Parliament.

7. The principle of compensation for "opting out" of an amendment was established in 1982. If the principle is otherwise acceptable it is not clear why a line should be drawn at "education or other cultural matters". The 1987 Amendment proposes to make the principle one of general application.

8. There was an assumption in some of the testimony that we have heard that the transfer of almost any power from the provinces to the federal government should be regarded as "a good thing". This is not necessarily so. Even areas of provincial jurisdiction that have a "national dimension", like education, provide an alternate mechanism to centralization in the hands of the federal government. Education is an example of a field where extensive interprovincial cooperation occurs. The regulation of financial securities markets is another example. Accordingly, the "national dimension" can be covered in ways that do not involve the transfer of more power to Ottawa. In these circumstances enlargement of the "opting out" formula would not, on the evidence presented to us, appear to create a serious problem. At worst, the status quo would be maintained.

9. Where provinces make such a transfer of power to the federal government, they are relieved of whatever financial cost is involved in running programs in that area of activity. The cost is assumed by the federal taxpayer. Provincial taxpayers are federal taxpayers as well. Accordingly, the effect of the amendment is simply that a province that opts out of the transfer of jurisdiction to Ottawa and continues to carry the cost of the program itself gets some share of the Ottawa dollars that are being made available to fund that particular area of activity. 
(b) The requirement of unanimity

10. The major change to the amending formula contained in the Constitution Act 1982 concerns section 41 of that Act. That section, it will be recalled, listed 5 feature of the Constitution of Canada that can only be amended with the unanimous consent a the House of Commons and the Senate and the legislative assembly of each province. The Constitution Amendment, 1987 would add to this list the following matters: 
(a) the powers of the Senate and the method of selecting Senators; 
(b) the number of members by which a province is entitled to be represented in the Senate and the residence qualifications of Senators; 
(c) the principle of proportionate representation of the provinces in the House of Commons prescribed by the Constitution of Canada; 
(d) the Supreme Court of Canada; 
(e) the extension of existing provinces into the Territories; and 
(f) notwithstanding any other law or practice, the establishment of new provinces. 
These items, at the present time, are subject to the 750 formula. 
(c) Where no changes are made

11. The Constitution Amendment, 1987 would not introduce changes to the other amending formulae now found in the Constitution Act, 1982. In other words, the House of Commons and the Senate's power to make laws amending Canada's Constitution "in relation to the executive government of Canada or the Senate and House of Commons" remains unchanged. Similarly, the authority of the legislature of each province exclusively to make laws amending the constitution of the province remains unchanged. Finally, the formula set out in section 43 of the Constitution Act, 1982 --concerning inter alia, alterations to boundaries between provinces and any provision relating to the use of the English language or the French language within a province--remains unchanged. 
3. The expanded unanimous consent formula

12. The major point of controversy raised by witnesses who appeared before the Joint Committee related to the proposal to require unanimity for the matters to be added to section 41 of the Constitution Act, 1982. To some extent, additions to the list of matters requiring unanimous consent are consequential upon other changes proposed in the Constitution Amendment, 1987. For example, adding the requirement of unanimity for any amendment concerning the Supreme Court of Canada (and not just its "composition" as under the 1982 formula) reflects the fact that the Constitution Amendment, 1987 would now entrench the Court in the Constitution and would introduce a new appointment process giving the provinces a voice in the appointment of judges to the Supreme Court of Canada. A similar rationale applies to entrenchment the proposed procedures for the appointment of Senators. Inclusion in the rule unanimity of changes "to the principle of proportionate representation of the provinces in the House of Commons prescribed by the Constitution of Canada" merely reflects the reality that the House of Commons, like the Senate and the Supreme Court of Canada, constitutes a fundamental institution of Canadian federalism, and like the Senate and the Supreme Court of Canada should be subject to amendment only with the approval of all the provinces.

13. The governments of the Yukon and the Northwest Territories, and the organizations of aboriginal people that appeared before us, expressed strong opposition to the requirement of unanimity for the creation of new provinces (or the extension of existing provinces into the territories). It was said that subjecting the territories' desire to achieve provincial status to the unanimous consent of all the provinces as well as that of the House of Commons and the Senate is unfair. This point has already been dealt with in Chapter 12 of our report.

Conclusion

14. The amendments addressed Quebec's demand for a veto over significant constitutional change. The response to Quebec was broadened to put all of the provinces on an equal footing. The two areas of primary importance are, first, the distribution of powers, and, second, changes in major federal institutions.

15. Quebec and the other provinces are protected against the adverse effects of an amendment whereby provincial legislative powers are transferred to Ottawa. The dissenting province(s) will be entitled to receive reasonable compensation, which presumably will bear some relationship to the money Ottawa would otherwise have laid out in the dissenting province(s) in relation to that particular field of activity. Otherwise, taxpayers in that province would be contributing to federal payments, e.g. for federal programs not available in Quebec, while having to pay again to their provincial governments for similar provincial programs in the same field.

16. Quebec and the other provinces are also protected against changes in national institutions to which they object. This principle was also established in 1982. The 1987 proposal simply adds to the number of existing federal institutions protected by the unanimity rule.

17. The Joint Committee is of the view that the proposed changes to the amending formula do not establish any new principles. They carry forward principles established in 1982 in a way that is consistent with both the "equality of the provinces" and a recognition of the stake that each and every province has in the basic elements of the Canadian federation.