The Impact on Public Law of Privatization, Deregulation, Outsourcing, and Downsizing: A Canadian Perspective

Over the past decade, Canada, following the lead of other Western democracies, has engaged in numerous, and at times fundamental, experiments in reducing or reconfiguring the role played by government. These experiments have been conducted, with varying levels of intensity and in varying forms, among the provinces and territories of Canada, as well as at the federal level. Foremost among the governments committed to this enterprise have been those of the provinces of Alberta (since 1992), Ontario (since 1995), and, from late 2001, British Columbia. The objective of the Canadian governments which have enthusiastically espoused this project has been in part making their jurisdictions more hospitable to international investment and other forms of participation. The restraints of public law in general, and regulatory oversight in particular, seem to many to be incompatible with increasing globalization within this environment.

Great public controversy has surrounded the efforts of these governments, despite the fact that they were elected because of their commitment to reducing the role of government and to freeing the private sector from regulatory “shackles.” The governments of Alberta and Ontario were indeed re-elected on the basis of such a commitment. Particularly in Ontario, the public controversy has translated into a barrage of legal challenges. Until very recently, however, the courts were rarely receptive to proceedings aimed at preventing the government from carrying through with its policies.

This paper makes two broad inquiries: First, what role do Canadian courts play in constraining government exercises of this kind? Second, how, if at all, did or should public law adapt or respond to the new realities? We present two general theses. First, the opportunities for using the courts to constrain governments in the initiation of these policies have been, and may well continue to be, very restricted. Only if the Supreme Court of Canada espouses the philosophy that the Canadian Charter of Rights and Freedoms is more of a social charter than has generally been supposed will the door open to more broad-based questioning of such government actions. Second, the prospects for any dramatic reshaping of the general principles of public law as a means of constraining the implementation of these policies and policing their possible fallout are equally unpromising.

The first conclusion is based primarily on the absence to this point of any strong or pervasive set of constitutional norms that operates to restrict governments and legislatures in the legislative effectuation of mandates for deregulation, privatization, and downsizing. The second hypothesis is founded on the unwillingness of Canadian courts to provide a substantive check on the exercise of executive power. It is also derived in part from three rather different and, to an extent, reassuring observations. First, in many instances, the reconfigurations within government have not in reality taken the affected areas outside of public law principles. Second, existing principles of general or common law have at least some capacity to police the way in which a “liberated” sector operates. Third, some domains of public law appear to contain the potential for growth and, as such, have at least limited capacity for providing extended bases for accountability when a new regime misfires in a way that harms individuals.