Thursday, October 17, 2013

Canada Could Have a Government Shut Down

(Update 1 (19:00 17 Oct) Below)

I won't lay odds on it, but this is entirely possible:
  • Liberals/NDP/coalition wins the 2015 Federal Election
  • Currently the Senate is 60 Conservative out of 105, plus 6 vacancies Harper could fill any time.  The Conservatives will have a safe majority in the Senate for at least several years barring resignations/deaths.
  • Government passes a budget ("supply" of funds for the government to run) in the House of Commons
  • Senate blocks it or pushes unacceptable amendments that the Government cannot accept
  • Government funding runs out without new supply bill passed

In fact, something like this happened in Australia.  The outcome was something known as the Australian "constitutional crisis" because the Governor-General dismissed the sitting Prime Minister despite the latter maintaining confidence of the House.  The GG justified this on the basis that the PM was unable to maintain supply - even though the blockage of supply was in the opposition controlled Senate, he claimed that was sufficient cause for him to intervene and replace the PM.

How likely is this here?  Somewhat less likely since our Senate is mostly appointed minus a couple western Senators who won provincially administered elections and may not be bold enough to do this.  It would also seriously run the risk of Canadians demanding the body's abolition, but as we just saw in the US, right wing political movements are capable of amazing miscalculations of public response to extreme measures.

I don't think this will happen, but I wouldn't put it past them either.

Update 1:

A kind reader challenged me, arguing that in the event a new budget is not passed, the Government just keeps spending at the existing levels in the last budget.  This person even provided this helpful link to a Parliamentary guide book to the budget process.  The section on "borrowing authority" is important because it shows how Canada does not have anything comparably stupid to the US self-destruct button named "debt ceiling."  On the subject of supply as I read it:
  • Footnote 105 states that "The Financial Administration Act states that no payment shall be made out of the Consolidated Revenue Fund without the authority of Parliament"
  • The section on "interim supply" shows that just to debate and figure out the budget, Parliament has to pass a short term mini-supply bill to give itself time to figure out what the real budget will be
Then there's this useful Huffington Post piece (despite it arguing the exact opposite of my thesis), says:

Alison--But elections or coalition negotiations take time -- often months. What happens if government needs money during such a period and there is no Parliament? Why isn't the threat of service shutdown as severe in Canada?

Jane--I wasn't sure about this at first either, so I asked scholar Mark Jarvis, who told me that Canada fortunately has a back-up decision-maker in the Governor General, who can approve a Special Warrant that allows money to flow to the government without Parliament's approval.

Under law, this can only happen when three conditions are met: First, Parliament is dissolved (not prorogued). Second, a Minister indicates that the expenditure is urgent for the public good. And third, the President of the Treasury Board reports there is no money remaining for government to use. In this situation, the GG gives access to money from the Consolidated Revenue Fund. When a new Parliament is formed, it retroactively reviews any Special Warrant and approves them.

In the scenario I am describing where the Senate is holding up supply, this above scenario would not apply.  The above was designed for our responsible government system, where a government has fallen on the budget, and thus must contend an election, leaving the existing cabinet operating under curtailed powers to act in care-taker mode only until a new government is formed.  If the Senate is holding up supply, Parliament is not dissolved.

In fact, all this makes it more likely a Canadian GG would be tempted to follow the Australian model and deem a failure in supply in the Senate to be a government-dismissal moment.  In that event, I suppose we wouldn't have a US style government shut down, but an Australian style run-away Royal appointee.  It still seems to me that a shutdown remains possible, if the GG opts not to intervene.

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