As the American government faces yet another government shut down, one has to wonder whether a similar issue could take place north of the border. But comparisons are tough to make, given the basis of our two distinctly different political systems.
The short answer is yes, the Canadian government could potentially face a shut down that stops all but the most basic functions of the government. This can occur when parliament is prorogued or when a government fails to pass the annual spending bill, but the likelihood of such an event taking place is remote. And the cuts to services are less severe than south of the border.
“The government doesn’t close down, it’s just that the budget isn’t passed whereas in the U.S. something does have to be passed,” said Nelson Wiseman, director of the Canadian Studies Program at the University of Toronto.
“Here you just go to the governor-general and you get warrants to continue.”
Tax dollars flow from the Consolidated Revenue Fund, an account where taxes and government revenue are deposited to help pay for public services, to various government departments.
If a budget isn’t passed, the governor-general has the authority to approve spending in the meantime by power of a special warrant, a temporary line of credit that allows the government to continue withdrawing money from the Consolidated Revenue Fund.
In order to enact a special warrant, three conditions must be met under the Financial Administration Act that governs those powers: Parliament must be dissolved, a minister must put in a request for funds “urgently required for the public good,” and the president of the Treasury Board must attest that no money for said funding has been allocated by Parliament.
However, those payments ensure the continued funding of government and forbids any new expenditures from being made. Hence, funding for employment insurance, soldiers’ salaries and tax benefits can continue to be dispensed, but funding for a new subsidy program cannot.
“The definition of what can be covered [as essential spending] is quite broad,” said Jane Hilderman, executive director of Samara Canada, a non-partisan advocacy group that pushes for increased civic engagement. “It’s very hard to imagine a situation where there is truly a shut down.”
There’s a time limit of 60 days for special warrants, which places pressure on the country’s political parties to find a solution or hold new elections. And while the governor-general could theoretically reject a request for a special warrant, it’s highly unlikely given the strict conditions under which the warrant can be issued.
“There would be significant harm to Canadians on a day-to-day level if some of those programs were jeopardized,” Hilderman said.
The way in which the Canadian and American political systems handle failing to pass budgets highlights the differences between the two countries. “Our parliamentary system favours continuity, that’s why the executive is embedded in the legislature,” Hilderman said.
Proroguing parliament is the closest the Canadian government will usually come to a shutdown. And in that case, while the MP’s aren’t in parliament working on legislation, the government continues to function.
Furthermore, the Crown still has reserve powers, although set precedent means that they are rarely used except in emergency situations.
“Our system goes back to the monarchical system, which is that the monarch, or in our case the governor-general, can allot money, but even that has to eventually be voted on and approved,” Wiseman said. “In the U.S., there’s money there, but because it’s not authorized, it can’t be spent.”
In the United States, there’s no institution like the Crown. The highest powers in the land are the three branches of the American government: the executive, legislative and Judicial branches, with Congress being given the power of the purse as a check on the power of the executive branch.
And when a government shut down takes place, Congress does the opposite of the House of Commons, with lawmakers still at work while the government ceases to function.
“We haven’t set up that antagonistic checks-and-balances relationship here,” Hilderman said.
The last time a special warrant was issued was in the month before and after the May 2011 election, when the Harper minority government had its budget rejected by the Opposition and then failed to survive a vote of confidence. According to the Treasury Board’s site, two warrants issued for those two months totalled $24.5 billion. Most Canadians probably did not feel the impacts of that, according to Wiseman.
“Here you just go to the governor-general and you get warrants to continue. It’s just not an issue here, government just continues,” he said.
Therefore, it is possible for the Canadian government to shut down, but the effects of it won’t be felt as widely as in the American context.
The powers of the monarchy in our Westminster parliamentary democracy ensure that any shutdown will have a minimal impact on the daily lives of Canadians and pressures political parties to govern responsibly.