In thinking about policy coordination in an intergovernmental context, it is important to step back from time to time for a bit of perspective. In Canada – to an even greater degree than in other federal countries – both the federal and provincial orders of government are typically involved in most policy areas and policy-making is often (and perhaps inherently) competitive. This presentation: (1) argues that intergovernmental cooperation needs to be seen as a product of that competitive dynamic, rather than as its negation; (2) identifies how the need for cooperation varies across policy areas and the variety of different forms that cooperation can take; (3) explores implications for horizontal policy coordination of the emphasis placed on clarification of roles and responsibilities and on performance-based accountability.

1. Mythologies of intergovernmental
cooperation (and competition) in Canada
David Péloquin
Presentation to the
2nd Annual Horizontal Policy Management Conference
Ottawa, April 16-18, 2007

2. Contents
Cooperation and / or competition
Cooperation: from spontaneous to structured
Accountability: a double-edged sword?
Key messages
1
2
3
4

3. Cooperation and / or competition
1

4.  The myth of the “benevolent central government”:
 no distinction made between the broad public interest and that of
the central government
 central government viewed as principal – not as agent
 sub-national governments viewed as agents of central government
under its ultimate control
 Implications:
 supremacy of central government
 accountability of sub-national governments to central government
44
Who are the clients? (and who are their agents?)

5.  The myth of the “unworthy servants of the people”:
 governments (central and sub-national) viewed as largely
self-interested – not primarily motivated by the public interest
 governments as (untrustworthy) agents of “the people” requiring
close supervision through a system of “checks and balances”
 Implications:
 inter-governmental competition (both horizontal and vertical) as a
supplementary “check and balance”
 primary accountability of all governments to “the people”
55
Who are the clients? (and who are their agents?)

6.  The reality of multiple “publics” and their many “agents”:
 multiple stakeholders – electorates, media, academics (and
civil society generally) as well as governments – with overlapping
(and often shifting) identities and allegiances
 governments as composite entities with multiple centres of power
– most motivated by the “public interest” (but some maybe not)
 inevitable competition among governments, their various agencies
and organizations within civil society for support / legitimacy
among subsets of the population
66
Who are the clients? (and who are their agents?)

7.  Significant economic literature on the existence, advantages and
challenges of competition between and within governments:
 governments not benevolent dictators but complex organisms that
pursue an amalgam of private and public interests
 for the citizen – as for the consumer – a multitude of suppliers of
public services (and competitors for their allegiance) is potentially
beneficial as a source of “checks and balances”
 But: citizens also want order, clarity in roles/responsibilities and
intergovernmental harmony (as public goods in/of themselves)
Intergovernmental cooperation
within an (inherently) competitive dynamic
77

8.  There is no necessary contradiction between:
 an underlying competitive dynamic between governments
 the much-observed phenomenon of governments cooperating
(usually in the public interest)
 However, this happy outcome of a (different kind of) “invisible
hand” depends crucially on:
 a high degree of (overlapping) policy autonomy on the part of more
than one level of government (not a “joint decision trap” !)
 an engaged electorate (supported by media and “public academics”)
willing and eager to hold them accountable
No necessary contradiction between
cooperation and competition
88

9. Provincial-local
Federal
0 50 100 150 200 250 300 350CAD millions
99
Income support /Income support /
social servicessocial services
SupportSupport
to industryto industry
EnvironmentEnvironment
Education
and researchHealthHealth
Transport /
communication
Areas of overlapping federal and provincial expenditures Policing /Policing /
protectionprotection
DebtDebt
serviceservice
Defence /Defence /
foreignforeign
Transfers to otherTransfers to other
governmentsgovernments
DebtDebt
serviceservice
OtherOther
Significant overlap in Canada:
in both expenditures …
Significant overlap in Canada:

10. Significant overlap in Canada:
… and in access to revenues
Significant overlap in Canada:
Provincial-local
Federal
0 50 100 150 200 250 300 350CAD millions
Property taxesProperty taxes
FederalFederal
transferstransfers
OtherOther
InvestmentInvestment
incomeincome
User feesUser fees
Payroll taxes
CorporateCorporate
taxestaxes
Sales and
consumption
taxes
PersonalPersonal
income taxincome tax
1010
Jointly occupied tax fields

11. CooperationCooperation and / orand / or competitioncompetition11
Cooperation: from spontaneous to structured
2

12.  “Natural sorting” of roles and responsibilities, reflecting:
 “first mover” / “follow the leader”
 public aversion to “wasteful” overlap and duplication
 Regular exchanges of information and informal-to-formal meetings
of first ministers, ministers and officials (hundreds annually)
 Semi-codified “rules of the game”
(e.g. the 1999 “Social Union Framework Agreement” or SUFA)
 Hundreds of actual agreements on specific policy issues
 A few examples of highly formalized joint decision-making
(e.g. the Canada Pension Plan)
The many faces of cooperation
1212
Intergovernmental cooperation in Canada ranges from:

13. Main forms of cooperationMain forms of cooperation
Nature of policyNature of policy
jurisdictionjurisdiction
Example(s)
Informal information sharing,Informal information sharing,
consultations and coordinationconsultations and coordination
Parallel jurisdictionParallel jurisdiction
(with “spillovers”)(with “spillovers”)
Employment insurance /
social assistance;
many regulatory matters
Informal information sharing,Informal information sharing,
consultations and coordinationconsultations and coordination
““Coordinate”Coordinate”
jurisdictionjurisdiction
Criminal law / administration
of justice
Joint decision-making (CPP) andJoint decision-making (CPP) and
informal coordination (QPP)informal coordination (QPP)
ConcurrentConcurrent
jurisdictionjurisdiction
Public contributory pension
plans (i.e. CPP/QPP)
1313
The form of cooperation varies by policy area…
Constitutionally “fixed” jurisdictions

14. Main forms of cooperationMain forms of cooperation
Nature of policyNature of policy
jurisdictionjurisdiction
Example(s)
Harmonized tax collection agreementsHarmonized tax collection agreements
(TCAs);(TCAs);
“first mover” / “follow the leader”“first mover” / “follow the leader”
Taxing powerTaxing power
Management of jointly
occupied tax fields
Specific-purpose transfersSpecific-purpose transfers
(with few conditions);(with few conditions);
non-binding commitments;non-binding commitments;
“first mover” / “follow the leader”“first mover” / “follow the leader”
Spending powerSpending power
Most major programs
(e.g. health, education);
income support through tax
expenditures; support to
industry and to the arts
1414
The form of cooperation varies by policy area…
Constitutionally “fluid” jurisdictions

15. … in accordance with comparative advantage
Government-funded
policy “pillars”
(usually highly subsidized)
IncomeIncome
supportsupport
e.g.: pensions,e.g.: pensions,
socialsocial
assistanceassistance
NoNo clearclear
comparativecomparative
advantageadvantage
IncomeIncome
supportsupport
e.g.: pensions,e.g.: pensions,
socialsocial
assistanceassistance
NoNo clearclear
comparativecomparative
advantageadvantage
Services &Services &
“in-kind”“in-kind”
benefitsbenefits
e.g.: education,e.g.: education,
health care,health care,
social servicessocial services
ClearClear provincialprovincial
advantageadvantage
Services &Services &
“in-kind”“in-kind”
benefitsbenefits
e.g.: education,e.g.: education,
health care,health care,
social servicessocial services
ClearClear provincialprovincial
advantageadvantage
“Assisted self-help”
policy pillars
(unsubsidized or partly subsidized)
Tax-Tax-
assistedassisted
savingssavings
e.g.: privatee.g.: private
retirementretirement
savings planssavings plans
StrongStrong
federalfederal
advantageadvantage
Tax-Tax-
assistedassisted
savingssavings
e.g.: privatee.g.: private
retirementretirement
savings planssavings plans
StrongStrong
federalfederal
advantageadvantage
Contributions-Contributions-
fundedfunded
insuranceinsurance
e.g.: CPP,e.g.: CPP,
employmentemployment
insuranceinsurance
MostlyMostly
federalfederal
advantageadvantage
Contributions-Contributions-
fundedfunded
insuranceinsurance
e.g.: CPP,e.g.: CPP,
employmentemployment
insuranceinsurance
MostlyMostly
federalfederal
advantageadvantage
Direct orDirect or
assistedassisted
lendinglending
e.g.:e.g.:
studentstudent
loansloans
ModestModest
federalfederal
advantageadvantage
Direct orDirect or
assistedassisted
lendinglending
e.g.:e.g.:
studentstudent
loansloans
ModestModest
federalfederal
advantageadvantage
1515

16. … and (in some cases) according to certain rules
Example: Social Union Framework Agreement (SUFA)
 In 1999, federal government and nine provinces committed to:
 “social union principles”: equality, accessibility, citizen participation,
partnerships with stakeholders, sustainable funding
 removing barriers to inter-provincial labour mobility
 transparency and public accountability to citizens (not to each other)
through measuring and reporting on social program results
 “working in partnership” (including joint planning and collaboration,
reciprocal notice and consultation)
 guidelines on use of federal spending power (when new federal transfers
created or new direct federal spending in areas affecting provinces)
 dispute avoidance and resolution
1616

17. Accountability: a double-edged sword?
3
22 Cooperation: from spontaneous to structuredCooperation: from spontaneous to structured
CooperationCooperation and / orand / or competitioncompetition11

18. 1818
Does anyone here like being held accountable?
 Probably not (in most cases) …
… though most of us instinctively grasp its broad benefits:
 maximizing public benefits of government actions (and minimizing
private “capture” of public funds or the benefits they generate)
 responsiveness to evolving needs/demands of citizens
 pressure to constantly improve programs/policies through
experimentation and emulation of “best practices”
 ability to identify/redress errors sooner, rather than later

19. 1919
Need to be aware of
what makes for effective accountability
 “Critical political mass”:
 engaged electorates, journalists, “public” academics and a vigorous
civil society
 engrained habits of public inquiry and discourse
 Transparency:
 public access to information that is relevant, timely and comparable
across jurisdictions
 open fora to enable stakeholders to defend their interests
 (relative) policy simplicity
 Free entry by alternative providers of public services

20. Need to be aware of
when accountability can be dysfunctional
Need to be aware of
2020
 “Self-appointed guardians of virtue”:
 de facto accountability to more powerful government (usually the
central government), rather than to local citizenry
 especially problematic when “senior” government doesn’t
understand the policy area
 Absence of “critical political mass”:
 inadequate local “checks and balances”
 Unrealistic or unattainable targets:
 may foster widespread sense of ongoing policy failure

21. Key messages
4
Accountability: a double-edged sword?Accountability: a double-edged sword?33
22 Cooperation: from spontaneous to structuredCooperation: from spontaneous to structured
CooperationCooperation and / orand / or competitioncompetition11

22. 2222
Key messages
 Cooperation across orders of government is not inconsistent with
the reality of intergovernmental competition …
… and can even be a sign of a healthy competitive dynamic between
(in Canada) highly autonomous public policy entrepreneurs
 Cooperation does not imply “joint decision-making” and can take
many forms
 Governments should focus on what they do best (“comparative
advantage”) – though this can/does evolve over time
 Need realistic accountability based on clear roles/responsibilities,
transparent policy-making and timely, relevant information