WELCOME BACK Political Economy of Social Welfare SOWK 2100 Spring Summer 2006 Week End

1
WELCOME BACK!Political Economy of Social
WelfareSOWK 2100 (Spring / Summer 2006)Week End
3, 26 27 August 2006Instructor Andrew
Webster
2
Readings and Preparation

• By now you should have read all chapters of Rice
  and Prince!
• The readings for this week are not heavy
• Reading (18) Canada Health Act.
• Reading (19) Managing Medicare The
  Prerequisite to Spending or Reform. C.D. Howe
  Institute.
• Reading (20) The Incredible Shrinking 1,200
  Child Care Allowance How to Fix it. Caledon
  Institute of Social Policy.

3
The Test (35)

• Tomorrow at 100 p.m. sharp. Dont be late.
• Two hours (more time than will be needed).
• Based largely on Presentations 1 2, but
  Presentation 3 contains useful review material.
• Know the answers to the questions which were
  indicated in class!
• It would be wise to study tonight.
• No need to re-read all the readings, if you have
  already gone through them properly.
• There will be a tiny bit in the test on todays
  materialjust enough to encourage staying awake!
• Relax. It will not be terrifying.

4
Supplemental Quiz

• As agreed in class, people who have missed two
  days may write a short quiz valued at the 5
  attendance mark which they lost.
• This is to demonstrate an understanding of the
  material covered, and recover the lost attendance
  mark.
• The quiz will take a few minutes and will be
  administered TODAY.
• Everyone writes the quiz, as preparation and
  review for the test tomorrow, but only people who
  missed two days get the mark added to their grade.

5

• REVIEW
• REVIEW
• REVIEW

6

• What is the distinction that the 1601 Poor Law
  made between categories of paupers seeking
  relief? IMPORTANT

7
Herein lies the origin of the legal distinction
between the employable and the unemployable,
between the undeserving and the deserving.

• Able-bodied unemployed, undeserving of charity
  because their unemployment is due to their
  laziness.
• The disabled poor, deserving because they are
  unable to work through no fault of their own.
• Almost 400 years later, which category were
  Indians put into?

8
What is political economy? IMPORTANT

• About the structures and processes in the
  exercise of power and in production and
  allocation of resources, and to an
  interdisciplinary perspective for understanding
  these structures and processes.
• Resources Tax revenues.
• The study of how government resources are
  allocated considering the balance between
  available capital (government spending power) and
  political priorities.
• In Canada, political economy is about power (the
  level of government responsible), resources
  (fiscal capacity to fund social measures), and
  ideology (to desire or to oppose those measures).

9
What is political economy? (2)

• In Canada, political economy of social welfare is
  about the rise and fall of government social
  welfare programmes considering factors including
• Ideology (Liberal, Conservative, etc.).
• Election (and re-election) priorities.
• Government revenues (ability to pay for
  programmes).
• Taxation powers and capacity.
• Debt and deficit.
• Needs of the population.
• Federal versus provincial jurisdiction.
• Government vs. private sector.
• Philanthropy.
• The Indian Problem.

10
What was the Indian Problem?IMPORTANT

• Under the old Indian Policy The problem was
  that Indians refused to assimilate and embrace
  the idea of enfranchisement into the
  predominantly White socio-economic and cultural
  fabric.
• I want to get rid of the Indian Problem...our
  object is to continue until there is no single
  Indian in Canada that has not been absorbed into
  the body politic and there is no Indian question
  and no Indian Department.
• Duncan Campbell Scott, Deputy Superintendent
  General
• Indian Affairs, 1920

11
Destitute Indians Cost Money

• Quantities of food and clothing have been issued
  during the months of June, July, August and
  September, and it is not probable that this was
  required at that season of the year in a district
  having plenty of fish and game. In August
  quantities of fishing nets and twine were given
  out and there is no apparent reason why the
  Indians should not buy them as usual. At
  Christmas flour, tea and sugar were issued to
  many, which was apparently a present from the
  officer in charge of the posts. Charges were
  also made for making coffins and digging graves
  for Indians. This is unusual and not considered
  necessary as the Indians are perfectly capable of
  doing that work for their dead and it is only
  right that they should be taught to do it.
• Departmental Accountant to Hudson's Bay Company
  Fur Trade Commissioner, 29 May 1905.

12
Actual Suffering

• The principle of "actual suffering" had underlain
  Indian relief policy since the 1880s, when the
  Superintendent General declared
• Well, most of the Indians are miserably poor.
  If they were not they would not need Government
  assistance. All the Government can do is to keep
  them from actual suffering. And it does that
  only when the Indians make some attempt to help
  themselves. i
• i The Facts Regarding Indian Administration in
  the North-West, op. cit., p. 20. A lengthy,
  vehement response to Opposition criticism that
  Indians were being mismanaged, starved, and
  poisoned. It stands as a splendid illustration
  of the faith the Department had in the ration
  system.

13
Poor Law principles in action

• Relief should be given only to those actually
  incapacitated through illness or physical
  deformity, or temporarily destitute through some
  unavoidable misfortune. No relief should be
  given to Indians who have able-bodied, unmarried
  sons, capable of supporting them. In all cases
  relief should consist only of such bare
  necessities as flour, pork or lard, tea in
  limited quantities and ammunition when the
  recipient is able to make proper use of it. When
  ammunition is given there should be a lesser
  issue of provisions.
• In cases of permanent destitution clothing may
  be given, but in no case more than one summer
  outfit and one winter outfit and such clothing to
  be of the plainest and most serviceable nature.
  In cases of serious illness, milk, sugar, and
  such necessities may be given in limited
  quantities. In no other circumstances must these
  be issued. It is not the intention of the
  Department to outfit Indians for hunting and
  accounts of this nature will not be paid. It is
  proposed to introduce some means of inspection in
  connection with relief vouchers and any cases
  reported by our officers as being undeserving of
  relief will be deducted from the accounts.
• Circular memo from Assistant Deputy and
  Secretary of Indian Affairs, 31 May 1917.

14
What is the Indian problem today? IMPORTANT

• Great socio-economic disparities cost billions
  that could be directed towards the elements of
  the electorate who decide the outcome of
  elections.
• Indian poverty and ill-health constrains
  Government spending in more popular areas.
• Indian programmes are best offloaded onto other
  governments.

15
Political economy is about political priorities
vs the financial resources available
16
What was the old Indian Policy?

• Civilisation and Assimilation
• Civilisation and Assimilation
• Civilisation and Assimilation
• Civilisation and Assimilation...

17
The Indian Policy What has changed?

• Indians since 1951 are citizens so all welfare
  state programmes should apply. Early welfare
  state programmes were for citizens only.
• Since 1963/64, federal policy is that the
  provinces should deliver and fund all services to
  Indians on and off reserves.
• Indians are entitled to the same services as
  other Canadians. Canada claims that the
  provinces are denying Indians services on
  reserves.
• Continued federal involvement at a minimum level
  is on humanitarian grounds. IMPORTANT

18
The Old Ration or Relief System

• Under the old Indian Policy, Indians were at
  excluded from participation in welfare state
  programmes of general application. IMPORTANT
  For many years, the welfare state did not develop
  with all Canadians in mind.
• Until the 50s / early 60s, Indian Affairs
  administered a harsh and punitive Indian relief
  system of destitute and medical relief.
• This pre-dated the welfare state by many decades.
  
• This alternative ideology reflected the thinking
  that Indians were subordinate and wards.
• Poor Law administration principles applied.

19
Indians and the development of the welfare state

• While the welfare state was developing towards
  its zenith, from 1945 to 1964 the Indian relief
  system or ration system collapsed in face of
  indefensible public criticisms.
• Gradually, Indian people were admitted to the
  rapidly evolving array of mainstream federal and
  provincial programmes.
• By 1964 Indian moneys were no longer appropriated
  for basic welfare services. 100 federal now.
• Admission to the welfare state was both a good
  and a bad thing in social, cultural, and economic
  terms.

20
Provincial responsibility? Since when?

• Ottawa exercised robust federal-only relief
  administration with a hands-off provinces
  policy.
• A main feature of the emerging welfare state was
  a shift from ration relief towards cash benefits
  paid direct from the government.
• Cash in the hands of Indians was thought ruinous
  to cultivating a work ethic, and liable to be
  spent on alcohol.
• Everyone knew that the Red Man had no tolerance
  for drink. One of his genetic failings.
• Indians were not citizens but wards of the state.
  Only citizens could enjoy privileges like
  participating in social welfare programmes.
• This changed after the 1951 Indian Act.

21
The 1951 Indian Act?

• IMPORTANT. This is the Act we have today, little
  amended from 1951 when it was last rewritten.
• This Act reduced the authority of Indian agents,
  and allowed for increased band management of
  certain band affairs.
• This Act removed enfranchisement clauses that
  prevented Indians from seeking higher education.
• This Act made Indians Citizens. There was no
  longer a good argument against keeping Indians
  out of welfare state programmes.
• Indian Affairs now looked at the dismal Indian
  living conditions, realised the fur economy was
  dying, and new it had to act.
• VAST expenditures would be needed.

22

• The Dark Side
• of the
• Welfare State

23
Dark Side of the Welfare State

• Twenty years ago, Social Work taught that
  welfare state good and universalism best.
  Some in social work stick to this doctrine, but
  today most people in social policy feel that
  uniform social measures do not always mean
  equality, justice, or effectiveness. IMPORTANT
• The welfare state is increasingly seen as
  oppressive to other minorities.
• The welfare state has had some highly negative
  outcomes in the Aboriginal context.

24
Welfare Colonisation 1940s-1950s

• The federal government was critically aware that
  income from traditional pursuits was declining
  and welfare costs were rising even faster
• the time may not be far distant when it will
  be impossible for any person to make a living off
  fur and gradually, therefore, the population must
  be absorbed into some other industry. Trapping,
  even in the northern regions where there is a
  relative abundance of fur bearing animals, must
  not be considered a decent source of
  subsistence...all reports emphasise this point
  one way or another. The actual revenue out of
  this occupation does not allow an Indian family
  to live decently. (Indian
  Affairs Branch Report, 1951)

25
Welfare colonisation (2)

• The answer seemed to lay in "integrating Northern
  residents as fully as possible into national
  life, either to provide a proletariat for
  envisioned commercial growth, or for what seemed
  humanitarian reasons".i
• Accordingly, from about 1953 a vigorous
  interdepartmental programme of forced settlement
  was implemented. Development was not just needed
  for Indians Indians were needed for development
  i.(Kehoe (1981), p. 500

26
Welfare colonisation(3)

• The nomadic way of life had to be stopped.
  Problems lay with the large part of the
  Aboriginal population living in rudimentary
  shacks in one or more locations according to
  their hunting and trapping lifestyle.
• Many families lived most of the year in remote
  hunting camps.
• Mobile Natives were harder to supervise and
  employ than stationary ones.
• Their nomadic existence in crude dwellings
  "serves only to perpetuate a mode of life which
  is difficult to eliminate." I
• i.N.A.C., RG85, vol. 1274, file 251-1-4, pt.
  1 L.A.C.O. Hunt, District Administrator to
  Director, N.A.L.B., 7 March 1955.

27
Welfare colonisation (4)

• The strongest influence to settle may have been
  the welfare schools the prospects of having
  children at home year-round and keeping the
  Family Allowance were highly desirable.
• The catch Indian families soon learned that
  having their children live at home did not mean
  they could take their children into the bush.
  Indian Affairs no longer approved of their going
  into the bush at all.
• Children were placed in foster homes on a
  temporary basis to enable them to remain in day
  school while their parents were away from the
  settlement trapping.
• The federal government was now somewhat
  schizophrenic over Indian education on the one
  hand speaking of its importance in promoting
  cultural respect and on the other recognising its
  value as an instrument of colonisation

28
Welfare colonisation fails

• Jobs were promised. Few materialised.
• Welfare and social housing was delivered.
• Seasonal make-work projects and UI supplemented
  social assistance.
• Benefits-in-kind were phased out throughout the
  1950s, and replaced with case.
• Intergenerational welfare dependency began.
• Indians could now consume alcohol, which they
  increasingly did.
• Social workers replaced Indian agents.

29
Dark side of the welfare state

• Generations of cultural oppression and poverty
  have embedded suicide in Aboriginal societies.
• Suicide has become a norm. In many communities,
  news of a death gets the response suicide?
• In some especially desperate communities, cluster
  suicide has become almost trendy for youth who
  see no way forward.
• Suicide is just one indicator of mental health,
  albeit the definitive indicator.

30
Welfare state and the clash of cultures

• The negative psychosocial impacts of continuing
  clash of cultures, especially in the urban
  milieu.
• - Kathleen Beardy is the latest in a long list
  of sad examples.
• Historical trauma Legacy of the residential
  schools and the policy of forced civilization
  and assimilation.
• - Essentially, PTSD applied to an entire group
  of people.
• - The psychosocial residue remains and is passed
  on.
• - Loss of parenting skills.
• - Emotional and sexual abuse.
• - Loss of social skills.
• - Loss of language.
• - Acquisition of foreign discipline corporal
  punishment.
• De-culturation unsuccessful acculturation
  marginalization.

31
Define Universality IMPORTANT

• Equal application of a social welfare programme
  to all persons in the target population.
• In particular, universality means benefits are
  provided regardless of the applicants ability to
  pay.
• Income is not a factor. There is no
  needs-testing or means-testing.

32
Is universality always good?

• Not necessarily, in a pluralist society if a
  programme cannot cross cultural boundaries well.
• Certainly the mainstream welfare programmes have
  been a mixed social blessing in the Indian
  context.
• Universality implies one set of standards and one
  delivery system for everyone

33
The welfare state was never universal?

• Gross failure of the Canadian welfare state to
  comprehend, much less address, the legacy of the
  Indian Policy.
• The Canadian welfare state is patently
  dysfunctional in the Aboriginal context. It
  always has been.
• The fed / prov jurisdictional question constantly
  strains intergovernmental relations over
  cost-shared programmes. However, in the
  Aboriginal context this sort of fiscal football
  match has extreme consequences.
• Additionally, the application of welfare state
  programmes to different groups, including
  Aboriginals, has been selective.
• The welfare state original developed for the
  citizenry (i.e., British subjects).
• The welfare state often excluded groups
  considered undeserving.

34
Main jurisdictional issues in Canadian social
welfareIMPORTANT

• Constitutional responsibilities (BNA 1867)
• Federal government (s. 91) specific powers of
  national scope (defence, criminal law, money,
  post office, international affairs, transport,
  etc.), taxation POGG.
• Provinces (s. 92) creating municipal
  governments local matters hospitals, asylums,
  charities education (s. 92) agriculture (s.
  93) residual powers (what is not specifically
  federal).
• Provinces have primary health and social
  jurisdiction.
• In 1867 there was little government and few
  government services. Government had to develop
  to keep pace with industrialisation.
• S. 91(24) gives the Dominion Indians and lands
  reserved for Indians, but where does it say
  federal responsibility for Indian social welfare?

35
Define fiscal federalism IMPORTANT and know
examples including the first

• Fiscal federalism is how the federal government
  imposes national standards for social welfare
  programmes even though the provinces have most of
  the jurisdiction.
• Key to all of this is the greater federal power
  to raise revenues through its constitutional
  domination of taxation.
• The deal is simple You want the money? Then
  agree to these terms.
• Fiscal federalism is national standards by
  contract law.

36
Which federal statute launched fiscal
federalism? IMPORTANT.

• Old Age Pension Act (1927).
• The provinces were never happy about the bother
  and expense of pension administration in the case
  of Whites, let alone Indians, but they
  appreciated the Dominion's contribution.
  This is why they bought into fiscal federalism.
• This Act contained a clause excluding Indians
  from receiving benefits.
• This precedent helped keep Indians out of the
  emerging welfare state for half a century.

37
Polanyis double-movement IMPORTANT

• Community members are separated from their
  economic activities as governments create new
  economic structures, which spawn social
  disintegration and inability of members to care
  for themselves.
• Community members respond to these changes by
  demanding from government greater protection
  against debilitating effects of market
  liberalisation.
• Thus, government economic regulation - in the
  direction of market liberalisation - engenders a
  need for protection from the by-products of this
  very regulation.
• It is a sort of devils circle. A double
  movement.

38
Juggling Act

• Economic Liberalism
• versus
• Social Protection
• Until the latter 1900s, economic liberalism had
  limits determined mostly by the national and
  provincial governments. If social programme
  could be afforded, they could probably be put in
  place.
• Under globalisation, these limits were removed or
  degraded so that the system of welfare state
  social measures begins to erode after a period of
  stability.
• Important

39
Polanyis four historical lessonsIMPORTANT

• Governments, instruments of the new capitalist
  elites, created markets to allow these
  capitalists to buy and sell products.
• Creating these markets meant regulations to
• Limit community access to common property (e.g.,
  Enclosures Act, settlement provisions of Poor
  Law)
• Constrain community rights (access to wells,
  paths)
• Remove traditional barriers to trade and finance
  (guilds, building canals and turnpikes)
• Allow capitalists to treat land, labour, and
  capital as commodities.
• Relevance today the global economy is being
  separated from the state the same way that
  economy was disembedded from social relationships
  during industrialisation.

40
Main difference between the analyses of Polanyi
and Marx IMPORTANT

• Polanyi rationalised that communities mobilise to
  pressure government to enact new protections as
  market liberalisation removes their old
  protections.
• Marx saw that the lower class mobilises to
  overthrow government as market liberalisation
  removes old protections.
• BUT - Marx could not imagine capitalism with
  social programmes a main reason why there were
  no communist revolutions in the Western
  industrial democracies.

41
Polanyis theory and early Canadian social policy

• For protection during industrialisation, people
  turned to their communities for help, but the old
  system of municipal and charitable relief was
  inadequate.
• New need for government programmes Need for
  government to organise it activity into
  programmes with specialised departments
• Guarantee subsistence income (cannot work, no
  fault of their own).
• Manage the insane.
• Old age pensions (not for Indians!).
• Categorical pensions (blind, disabled).
• Mothers allowances.
• Regulations regarding care of orphans.
• Public health / Disease control (prostitution,
  epidemic diseases).
• Other pre-welfare state, pre-universal
  programmes.

42
Evidence of the double movement today?Recent
social protections as economic circumstances
change

• Publicly-funded, chronic care nursing homes are
  now the final residence of most infirm aged
  citizensThese result, in part, from municipal
  and higher level pressure by caregivers whose
  economic circumstances prevent them from spending
  the necessary effort formerly families cared
  for their elders.
• RRSPs and Registered Education Savings Plans were
  introduced, after considerable lobbying,
  partially in response to rising numbers of
  self-employed who have no access to group plans,
  and in recognition that govt pensions are
  increasingly unable to meet subsistence needs.
• Number of services for wife-abuse victims grew
  tenfold during 1982-1990. Government expenditures
  on these service rose dramatically during a
  decade of fiscal restraint, demonstrating that
  battered women (thus high risk) are better off
  today as a result of state involvement.
• In Cape Breton, community economic development
  projects restored some small commodity capitalism
  to local levels through worker co-ops.
• Programmes are put in place to deal with the
  social outfall of gambling addiction, when
  business pressures result in introduction of slot
  machines and casinosresult of pressure from
  agencies and groups.
• The NCB (now CCTB), and provincial child tax
  benefits, resulted from public / interest group
  pressure following the elimination of universal
  family allowances.
• Economic pressures (fewer tenure jobs, more
  McJobs, loss of universal programmes, more/higher
  user fees, etc.) mean that both parents have to
  work nowadays Day care subsidies help them stay
  in the labour forceresult of interest group
  pressure.
• The Canada Health Act (1984) was a response to
  citizen / interest group pressure that
  unregulated physicians, as private practitioners,
  were charging user fees.

43
Three Dominant Forces at Work Today

• Three dominant forces are changing how Canadians
  thing about social welfare according to Rice
  Prince
• Globalisation of the economy.
• Changing needs for social protection.
• Desire by groups for community recognition
  (Aboriginal communities fit in here).

44

• GLOBALISATION
• The greatest economic paradigm shift since the
  early industrialisation period that Polanyi
  described.

45
Government reaction to globalisation

• IMPORTANT
• New regulations to protect business investors and
  ensure transparent, ethical management.
• Pressure to privatise government services.
• Stagnation of development in union legislation.
• Reduced government revenues user fees for
  services.
• Pressure to reduce government fewer services.
• Freedom of consumer choice pressure to lower
  public taxes less spending power for social
  measures.
• Government behaves like business (e.g., Health
  Canada has a Business Plan).

46
Government reaction to globalisation (2)

• Re-orientation of revenues and expenditures makes
  health care seem less affordable than ever.
• Pay-as-you-go including education.
• Grants become loans.
• Universal becomes needs-tested / means-tested.
• Cash assistance becomes tax benefits.
• Benefits are reduced.
• Offloading costs to lower orders of government.
• Services must be provided, so as responsibility
  cascades downwards, consumers still pay but
  through user fees or lower-level taxes.
• Return to greater role of philanthropy (missions,
  charities, volunteerism).
• Etc.

47

• CRISIS
• OF THE WELFARE STATE
• SHOCK! HORROR! SURPRISE!

48
AUCHTUNG! PANZER!

• Is this a crisis or a phoney war?
• Or maybe the welfare state DOES need to change?
• Before discussing any crisis, maybe we should
  first be clear on what the Canadian welfare state
  is!
• Many people speak of a crisis, but they cannot
  really say what is under threat.
• Lets review (quickly!) how the welfare state
  developed to its recent (final?) form.

49

• Dont worry about each and every piece of
  legislation.
• Just follow the history and know about the key
  statutes.

50
Important dates / events in political economy of
social welfare in Canada IMPORTANT

• 1601 The amalgamated, classic Elizabethan Poor
  Law
• 1780-1830 Industrial Revolution
• 1834 Major Poor Law reform (UK) in response to
  industrialisation / urbanisation
• 1867 Confederation.
• 1867-1900 Early roots / preconditions of
  welfare state.
• As per Mary Eliz. Wallace. Urbanisation /
  industrialisation (later in Canada than in UK)
  and need for government social protection. First
  provincial social welfare legislation.
• 1914-18 WW1
• 1927 Old Age Pension Act beginnings of fiscal
  federalism plus...
• 1929-39 Great Depression Start of systematic
  federal and provincial relief assistance.

51
Important dates / events in political economy of
social welfare in Canada (2)

• 1939-45 WW2
• Initial welfare state legislation. Discussions
  of a post-War welfare state. Keynesianism in the
  national economic recovery plan.
• 1951 Indian Act revisions (wards into citizens
  provincial laws of general application).
• 1956 UA Act first cost-sharing of social
  assistance / social services.
• 1964 Pearson Liberals rewrite federal
  responsibility for Indians.
• 1965 CAP Final piece in welfare state social
  legislation.
• 1984 CHA Final piece in welfare state health
  legislation.
• 1995 CHST Liberals reduce transfers and
  programmes.
• 1999 Social Union framework agreement.
• 2006 Conservative minority New era of
  decentralisation?

52
Legislative milestones in the Canadian welfare
state

• Pre-1900 Beginnings of modern social welfare
  legislation
• In 1871 only 7 cities had 20,000 population and
  only Montreal had 100,000.
• Quebec Municipal Code (1871).
• Ontario Charity Aid Act (1874) made grants to
  charities more regulated.
• Factory Acts (Ontario 1884, Quebec 1885, Manitoba
  1900).
• 1901-1926 - Provincial Legislation
• Workers compensation mothers pensions or
  allowances minimum wage laws pensions (veterans
  and old age).
• 1927 Federal Old Age Pension Act IMPORTANT
• Beginning of fiscal federalism.
• Exclusion of Indians and Eskimos for half a
  century.

53
Legislative milestones (3)

• 1929-1939 Great Depression
• Indian relief first cut, later the principle of
  no fault of their own was first applied to
  Indians and the full relief scale was given to
  the able-bodied.
• In 1930 Ottawa began assist the provinces with
  depression relief.
• Dominion Housing Act (1935) and National Housing
  Act (1938).
• The economic catastrophe showed need for
  permanent government presence in unemployment
  relief. This type of assistance was beyond the
  provinces revenue-generating abilities.
• Key provinces resisted federal intrusion into
  social welfare although federal money was needed.
• 1937 - Royal Commission on Dominion-Provincial
  Relations (Rowell-Sirois Commission) studies the
  jurisdictional question.

54
Legislative milestones (4)

• 1929-1939 Great Depression
• Massive increase in federal social welfare
  funding.
• New provincial legislation obligated some
  provinces to give continuing relief to the
  unemployed.

55
Legislative milestones (5)

• 1939-1945 WAR!
• Total, massive industrial mobilisation eliminated
  White unemployment. Numerous emergency statutes
  were enacted.
• Indians were forced to do war work or starve.
• By 1943 we were starting to win. Cautious
  discussion began over a post-War Canadian welfare
  state.
• Vast socio-economic realignment was needed in
  order to restore a peacetime economy and
  re-integrate large numbers of service personnel.
• The trick was to maintain full employment while
  switching back to civilian production (Leading
  economist John Maynard Keynes).

56
Keynesian Economics - IMPORTANT

• Keynesian economics holds that full employment is
  the goal maintain that, and interest rates will
  be low and GDP will be maximum.
• Keynes said that governments need to spend their
  way out of a recession or depression this will
  trigger economic recovery and return to higher
  tax revenues.
• Social policy is a main government tool for
  economic adjustment.
• Current economic thinking holds that GDP and
  employment will be highest when interest rates
  are kept low Govts should keep interest rates
  low and leave job-creation to the private sector.

57
Legislative milestones (6)

• 1939-1945 WAR!
• 1940 - Unemployment Insurance Act, the first
  social insurance against unemployment in Canada.
  It required a constitutional amendment.
• 1944 - Family Allowance Act paid benefits to
  recipients directly by the new Department of
  National Health and Welfare (DNHW). Rations not
  cash for Indians. IMPORTANT
• 1945 Radical measures to move from wartime to
  peacetime economy.
• 1945 Indian pensions / ration system debate
  begins in the House of Commons, all stimulated by
  the issue of Indian veterans.
• 1945 New interest in giving Indians
  citizenship.

58
Legislative milestones (7)

• 1939-1945 WAR!
• Beveridge Report (1942) Keynesian economics
  laid the intellectual foundations of the Canadian
  welfare state.
• Rowell-Sirois Report was now being read. It
  began discussions on national standards for
  social programmes (despite provincial protests)
  and a national system equalising the fiscal
  capacity of the provinces.
• Marsh Report (1943) Social Security for Canada -
  most important document in the development of
  wartime and post-war social security measures in
  Canada. IMPORTANT
• Heagerty Report (1943) Health Insurance Report
  pictured a joint federal-provincial health and
  medical insurance scheme, with provincial
  administration. This strongly influenced federal
  health cost-sharing which began a decade later.
• Curtis Report (1944) Housing and Community
  Planning was a milestone in shaping federal
  involvement in the field of housing.

59
Legislative milestones (8)

• 1946-1956 Ordered Series of Measures Begins
• 1951 - Blind Persons Act provided for
  federal-provincial cost-sharing of 7525 for
  provincial allowances to blind persons between 21
  and 69. Henceforth Indians would not be excluded
  from so-called "universal" federal benefits
  legislation. Nor was reserve residence seen to be
  a factor.
• 1951 - Old Age Security Act provided a 100
  federal pension to all persons over 70.
  Necessitated a constitutional amendment.
• Finally, Canada had a national statutory
  cash-based pension in which eligibility was not
  restricted by race. For persons over 70 and for
  blind persons over 21 including Indians, the
  spirit of the Poor Law had finally been put to
  rest.
• 1951 New Indian Act eliminated enfranchisement.
  Indians became citizens.
• More important the 1951 Indian Act now had
  provincial laws of general application apply to
  Indians unless the Indian Act said otherwise
  which is seldom would do!
• 1954 - Disabled Persons Act authorized
  federal-provincial 5050 cost-sharing for
  disabled persons aged 18 to 69.

60
Legislative milestones (9)

• 1946-1956 Ordered Series of Measures
• 1956 - Unemployment Assistance Act was the first
  federal statute to commit funding for social
  assistance. Allow provinces to provide
  "assistance to persons who are in need".
  Cost-shared 50.
• Unemployed employables - previously designated as
  undeserving because they were able-bodied - were
  the last socio-economic category to be covered
  under national income security legislation.
• No special provisions for Indians meant the start
  of provincial fiscal involvement off-reserve
  health and social services.

61
Legislative milestones (10)

• 1957-1965 Ordered Series of Measures
• 1957 - Hospital Insurance and Diagnostic Services
  Act. Predecessor of todays Canada Health Act.
  The HIDS Act was 50 conditional cost-sharing.
• 1964 at the Dominion-Provincial conference on
  Indian Welfare, Ottawa tabled a revised fiscal
  policy which claimed that no fiscal distinction
  should exist between on- and off-reserve.
  Offloading would intensify.
• 1965 Canada-Ontario Indian Welfare Agreement
  First and only.
• 1965 - Canada Assistance Plan Act IMPORTANT
  consolidated federal funding for all of the
  pieces of a modernised minimum income program
  disabled persons, female single parents and the
  unemployed not covered by unemployment insurance.
  
• With Old Age Pension (1951) and Guaranteed Income
  Supplement (1965), CAP provided a full range of
  nationally funded minimum income programs.

62
Canada Assistance Plan Act (1965)

• CAP established six principles for delivering
  welfare services IMPORTANT
• benefits must be based on need, irrespective of
  cause
• need must be established through a needs test
• assistance must be in the form of cash to all
  those who qualify
• no non-voluntary work-for-welfare
• provision for appeal must exist and
• residence period must not be a condition for
  receiving assistance.

63
Legislative milestones (11)

• 1966-1984 Ordered Series of Measures
• 1966 - Medical Care Act supplemented the Hospital
  Insurance Act by covering costs of physicians
  services outside of hospitals.
• 1984 - Canada Health Act was passed to discourage
  extra billing by physicians and hospital user
  charges, providing automatic penalties when a
  province allow such extra charges.
• The CHA marked the zenith of the cost-shared
  welfare state. A decade later later it began to
  unravel fast.

64
The cost-shared welfare state in crisis Was it
ever affordable or sustainable?

• Even before globalisation, the relatively
  generous welfare state (plus spending in other
  areas) was causing repeated federal deficits and
  driving up the federal debt to high levels, so
  much of the tax revenues went towards interest
  charges.
• Stock markets crashed in 1987 for international
  reasons. Recession ensued.
• Ottawa needed to reduce social welfare funding.

65
The welfare state in crisis

• 1991 - First moves to control costs The Mulroney
  Government "capped" federal CAP contributions to
  5. growth for have provinces Ontario, Alberta
  and British Columbia.
• Provincial welfare systems began to contract, at
  this point only slightly.
• The first of the great universal programmes,
  Family Allowance, was considered too expensive
  and was terminated by the Tories in 1993. A
  Child Tax Benefit (CTB) came into effect
  (harmonious with new thinking that social
  benefits should be delivered by the tax system).
• The CTB replaced not only Family Allowance, but
  the Child Tax Credit and Refundable Tax Credit.
  The new benefit includes a tax-based Working
  Income Supplement (WIS).

66
The welfare state in crisis

• The FN social welfare fiscal trajectory was
  considered unaffordable in the climate of
  fiscal restraint.
• Concerned over rising social assistance costs as
  a result of Bill C-31 Indians migrating to
  reserves, in 1989 Cabinet ordered an exit
  strategy for off-reserve social services to
  Indians.
• By 1993 INAC had abrogated all remaining first
  year off-reserve agreements.
• Savings were to be re-invested in on-reserve
  social services. In reality there was no
  reinvestment plan or monitoring mechanism to
  ensure this. The Public Accounts do not show
  that any re-investment happened.

67
Globalisation and the crisis of the welfare state

• This conflict between macro-economics and demands
  for social protection is what Rice and Prince
  call the crisis of the welfare state. This is
  not the whole answerthe welfare state was
  becoming unaffordable before globalisation added
  to its woes.
• Our main social programmes have been in crisis
  for two decades. They cannot be sustained at the
  same level of expenditure, nor justified when
  they conflict with global economic forces.
• The over-arching dictum Canada must be able to
  compete in the international free market. Many
  people view social programmes as impediments to
  competitiveness.
• The Canadian welfare state is now closer to
  equilibrium after being destabilised by fiscal
  shocks beginning in the 1980s.
• Free trade agreements (NAFTA, GATT, etc.) set in
  motion international changes which continue to
  alter the welfare state in Canada and
  elsewhere.
• Witness the fall of communism. This is how
  powerful these global economic forces are.
  Governments and ideologies fall!.

68
Globalisation and the role of the courts

• We have considered pluralisation different
  communities each demanding recognition and rights
  - and the role of the courts. What about big
  business and the courts?
• Globalisation only works if corporations have key
  rights similar to those of people. Corporations
  can challenge the legality of public policies
  when these policies constrain business
  activities.
• And they do.

69
Attractiveness to governments ofprivate sector
programme delivery IMPORTANT

• Governments now try to get out of any business
  that the private sector could occupy.
• Globalisation ideology has government focusing on
  regulation and on activities that cannot involve
  worthwhile profit.
• Privatisation is a way to reduce costs (although
  not always, and not always in the public good).
• Privatisation is a way to reduce risk and
  ministerial accountability.
• Privatisation smaller government good.
• Universality unaffordable bad.

70
Attractiveness to governments ofprivate sector
programme delivery (2)IMPORTANT

• Private administration is claimed to be
  inherently more efficient than public
  administration.
• Privatisation is a way to raise capital needed
  for expensive projects without raising taxes
  (e.g., P3 hospitals).
• Advocates of private health care claim that only
  private clinics and hospitals can shorten wait
  lists and provide much improved access to
  expensive equipment.
• Anomaly? Privatisation / deregulation is why
  Ontarios power generating system came close to
  collapse. Giant private sector players declined
  to make massive investments that were needed for
  maintenance and growth.

71
Attractiveness to governments ofprivate sector
programme delivery (3)

• AND
• Parliamentarians who support privatisation can
  expect for-profit corporate assistance to their
  party and robust support in their electoral
  activities.

72
What is societal pluralisation? IMPORTANT

• Pluralisation describes the growing divisions
  within Canada based on social characteristics of
  groups of people.
• Quite the opposite of the US melting pot.
• Not all is caused by multiculturalism-type
  tolerance.
• The 1982 Constitution is enhancing rights of
  groups.
• Additionally, intolerance is a factor
  (separatism, racism).
• Changing demographics large immigrant African
  population in Toronto dominant language in BC in
  30 years will be Chinese.
• Aboriginal rights.
• Sexual orientation rights.
• Religious rights (e.g., secular court debate).

73
What is societal pluralisation? (2)

• Changing sense of history / rewriting history.
• Liberal notion of independence from Britain and
  from the US.
• Greater intrusion of US ideologies via the media.
• Fragmentation of the Right.
• Greater visibility of neo-conservative religious
  right.
• Occupation by Liberals of the Conservative
  agenda.
• Plus the irrelevance of social democrats at
  national level ideological polarisation Right
  (west) and Centre (rest).
• Federal reaction to Quebec separatism means less
  exercise of federal power leading to
  regionalism.
• Ascendancy of the province.
• Multiculturalism backfires National and
  sometimes provincial identity diminishes, and
  large communities of ethnic groups maintain
  foreign traditions in conflict with mainstream
  secularism allegations of Islamic intolerance.

74
Pluralisation (3)
75
Diversity and equality in a pluralist welfare
community

• Integration into the full life of the society
  should not have to imply assimilation to dominant
  norms and abandonment of group affiliation and
  culture (Young, 1990).
• Is this fact or ideology?
• The Canadian welfare state was (is) based on
  secular and universal principles. Are these
  principles antagonistic towards group identity?
• Do we want different rules, different programmes,
  and different benefits for different groups?
• And should the different groups pay their own
  way?

76
Death of universality? IMPORTANT

• Citizenship in Canada is changing from that
  which accrues universally and uniformly in each
  individual Canadian, towards a still vaguely
  defined sense of the equal respect which should
  be accorded to groups, as groups. (Kerans, 1994)
• Prevailing federal discourse promotes diversity
  and advances equality, while universality is
  seldom mentioned outside of the CHA / medicare
  debate.
• Dilemma of Equality Should equality be achieved
  by taking away rights from groups with perceived
  extra rights?
• When should the Notwithstanding be used?

77
Limits of pluralism

• The folly of sharia in Ontario
• LYSIANE GAGNON
• Globe and Mail  Monday, September 5, 2005 1200
  AM  Page A15
• It was with nearly unanimous indignation that
  Quebeckers learned that, thanks to the Ontario
  government, Canada might become the first Western
  country to legalize sharia-based tribunals to
  settle marital and civil disputes -- and this,
  against the wishes of countless Muslim women.
• Outcome The Ontario Government, fearing sharia
  law would open the door to intolerable
  fragmentation and create Charter challenges,
  terminated the proposed sharia law project and a
  reportedly successful Hebrew law project already
  in operation.

78
Limits of pluralism (2)

• e.g., Roman Catholic School Boards (RCSBs) in
  Ontario
• Long tradition of having a separate school
  system for Catholics.
• In the 1990s, the RCSBs started receiving the
  same level of public funding as public boards.
• Does this weaken the public system, and diminish
  standards, by bleeding off scarce funding?
• Should the public also fund Hindu or Raelian
  school boards?
• Should the public also fund gay and lesbian
  school boards?
• Say that in a city the urban Aboriginal
  population is 10,000 Should an urban Aboriginal
  school board be formed?
• The question is Where does pluralism in social
  welfare lead?
• Who will set the limits, and what role will the
  courts have?

79
Charter rights IMPORTANT

• Every individual is equal before and under the
  law, and everyone has equal right to the benefit
  of the law without discrimination. (s. 15(1)).
• However, 15(2) states that this does not
  preclude any law, programme, or activity that has
  as its object the amelioration of conditions of
  disadvantaged individuals or groups including
  those that are disadvantaged due to race,
  national or ethnic origin, colour, religion, sex,
  age, or mental or physical disability.
• 15(2) allows for positive discrimination.
• All federal Indian legislation and the treaties
  are subject to Charter interpretation.
• Self-government is also subject (written into the
  agreements).

80
Pluralism and the role of the courts

• Charter of Rights and Freedoms IMPORTANT
• Increasingly, public policy is being defined by
  the courts. Governments especially the federal
  Liberals are disinclined to make policy when it
  might be challenged in court.
• The federal Liberals, especially, are against
  using the Notwithstanding clause.
• Quebec Liberals are not Language laws!
• The courts struck down the old federal
  legislation that limited abortions. The
  Conservatives are unclear about whether they
  would legislate new abortion controls.

81
Pluralism can create discontinuities

• Until the 1980s, sex in private between
  consenting adults of the same sex was buggery,
  sodomy, and gross indecency.
• Today being gay or lesbian is a lifestyle issue
  without special criminal legal provisions
  (although there are those who would
  re-criminalise it).
• Homosexuality used to be a mental disorder under
  the DSM. Overnight it was de-listed. A new
  disorder emerged difficulty adjusting to a
  homosexual orientation!
• Gay couples now have the right to marry, on
  grounds that to deny it is discrimination. Does
  this interfere with religious rights?
• Should public funding finance a religious school
  board that teaches that gays are abominations
  against nature?
• Easy way out Let the courts decide!

82
In this politics of diversity...

• Rice Prince argue that governments will have to
  create new policies that protect groups of
  citizens from damaging impacts of the social
  changes that stem from economic change.
• This assumes that Polanyis self-correcting
  double movement applies today as it did during
  early industrialisation.
• Well, does it????
• Be able to cite multiple examples of the
  self-correcting double-movement at work today and
  in the past, in Canada.

83
Pluralisation of the Political Right (!)

• The Great Tory Extinction (some say like the
  dinosaurs) left just two PC seats. The NDP were
  bitterly disappointed that PC dissatisfaction
  failed to translate into a major gain in NDP
  seats.
• The NDP did not yet understand that the political
  climate had shifted right, not to the centre as
  one expects when a Liberal Government is elected.
• Further political pluralisation showed in the
  rise of Quebec alienation Bloc Quebecois as Her
  Majestys Official Opposition.
• The shattered PCs began to rebuild their party.
  Party Leader Jean Charest worked hard with some
  success, before he went Liberal and moved to
  Quebec politics.
• New Liberals unrestrained! Similar to the New
  Labour Party which replaced the Thatcher
  Conservatives in the UK.

84
Pluralisation of the Political Right (2)

• The pluralisation of the right has its origins in
  the changing economic climate Polanyi.
• Voters considering themselves Conservative now
  split into two camps
• PC (right of centre, similar to the Liberals) and
  
• Social Conservative (farther right, anti-secular,
  anti-multiculturalism, pro-army, anti- gay
  marriage, pro- senate reform, anti-abortion, and
  pro- provincial powers.
• The Liberals successfully exploited this turmoil.
• The PC Party started to implode.

85
Liberal occupation of the Right-of-Centre

• In Opposition the Liberals had condemned NAFTA,
  but now they caved in to Big Business /
  globalisation and embraced free trade.
• A major sell-off of Crown corporations was in the
  works.
• Needing money the Liberals abandoned their pledge
  to scrap the GST. They needed the money to
  bankroll election promises in the Liberal Red
  Book.
• Funding for Aboriginals remained essentially at
  the historic growth rate.

86
Offloading and cost avoidanceFederal Social
Security Reform (SSR) in the 1990s.

• The Liberals felt they had to balance the books
  in order to survive. The Tories would have
  achieved this eventually had they been
  re-elected. The Liberals opted for shock action.
• Tories had been reluctant to do more than cap
  CAP. The Liberals at first maintained these
  caps.
• However, the Liberals would soon go much further.
  They would start disassembling key elements of
  the welfare state and erode fiscal federalism
  despite their ideological commitment to national
  standards.
• The Liberals needed a plan to reduce transfers to
  the provinces while minimising organised
  opposition. In 1993 they announced Social
  Security Reform (SSR).
• SSR was supposed to be a great consultation
  exercise involving P/T governments and citizens
  with a view towards modernising social security
  (formerly usually known as the welfare state).
• SSR was a diversion to buy time.

87
The February 1995 federal BudgetProfound change
in the fiscal landscape.

• SSR consultations were over.
• The 800 M Strategic Initiatives Programme was
  terminated with only half of the funding spent.
• 1995 CHST replaced existing health and social
  transfers. It terminated CAP (5050 cost-shared
  welfare services) and replaced Established
  Programs Financing (EPF) which included
  post-secondary education and health care.
• Initial CHST entitlements were reduced by 7
  billion over two years. Federal health
  contributions to the provinces declined 25.
• Later, the CHST was split into Canada Social
  Transfer and Canada Health Transfer.

88
The February 1995 Federal BudgetProfound Change
in the Fiscal Landscape.

• The CHST abandoned most of the former CAP
  conditions
• Benefits must be based on need, irrespective of
  cause
• Need must be established through a needs test
• Assistance must be in the form of cash
• No non-voluntary work-for-welfare
• Provision for appeal must exist and
• Residence period must not be a condition for
  receiving assistance.
• The CHST originally retained only one CAP
  condition No residency period. A second has
  been added Provision for appeal must exist.
  IMPORTANT

89
The February 1995 Budget Profound reaction by
provincial systems

• Immediate provincial response Outrage then
  cut-backs.
• Less money but fewer conditions let Ontario and
  Alberta Conservative Governments slash SA
  benefits and institute workfare.
• New interest in eliminating welfare fraud,
  which was never shown to be endemic anywhere.
• In times of economic stress and reduced services,
  public generosity towards the poor diminishes.
• Taking advantage of this climate, the Ontario
  Conservatives enacted legislation to regulate the
  undeserving unemployed beggars and the homeless.
  This was packaged as protection of the public.

90
Profound reaction by provincial systems (2).

• Provincial and federal grants to major social
  welfare agencies (e.g. CCSD) were reduced.
• The provinces made major medicare contractions
• closed and merged hospitals reducing the number
  of beds
• new super-hospitals
• reduced their lists of medically necessary
  medicare services
• dismissed doctors and nurses, many of whom left
  to the US.
• Increase in provincial interest in private health
  care.
• To be sure, this trend began in the early 90s
  before the Liberal Government. The Liberals
  simply accelerated it greatly.

91
New Normal Reduced federal funding

• The deal Less money but more flexibility to use
  it.
• CAP restrictions were lightened, allowing
  provinces to impose work-for-welfare and other
  punitive measures.
• Canada Health Act principles remained in effect
  especially no private administration of health
  care.
• Rapidly, Ottawa started to lose its leverage to
  maintain national standards as its dollar
  contribution decreased. Fiscal federalism
  started to unravel.

92
Consequences of reduced federal funding

• IMPORTANT
• The case for for-profit health care is stronger
  than ever.
• Federal ability to enforce the prohibition is
  seriously weakened, despite recent augmentations
  to federal health transfers.
• Provincial health contractions often went too
  far, seriously weakening the medicare regimes.
• Increasing health costs, and still-low federal
  contributions, mean that some provinces are eager
  to try anything to reduce costs and improve
  access to quality services.

93
Globalisation Always lurking.

• Powerful multinational companies are eager to get
  into the health insurance and health delivery
  business in Canada.
• Severe contractions occurred in the UI programme
  in the 1990s (now called EI).
• Ottawa has vacated various programme areas to the
  provinces like it or not, and sometimes
  unwisely.
• Other severe shocks to the welfare state, some of
  which are ongoing.
• Final abandonment of Keynesian economics Now
  governments strive to keep interest rates low,
  assuming that low rates maximum employment.
• In the post-Keynesian era, Governments have
  abandoned the notion that full employment is
  possible.
• A structural level of unemployment is now
  socially acceptable and necessary for the private
  sector to be responsive to new opportunities and
  markets.

94
1993 Programme Review Designing a more
business-friendly federal government.

• The 1993 Programme Review involves six tests
• 1. Public Interest test. Does the programme area
  or activity continue to serve a public interest?
• 2. Role of Government Test. Is there a
  legitimate and necessary role for the federal
  government in this programme area or activity?
• 3. Federalism Test. Is the current role of the
  Federal Government appropriate, or is the
  programme a candidate for realignment with the
  provinces?
• 4. Partnership Test. What activities or
  programmes should or could be transferred in
  whole or in part to the private/volunteer sector?
• 5. Efficiency Test. If the programme or activity
  continues, how could its efficiency be improved?
• 6. Affordability Test. Is the resultant package
  of programmes and activities affordable within
  the realm of fiscal restraint? If not, what
  programmes or activities would be abandoned?

95
Welfare and workfare A hand up? or
discipline and punish?

• Social assistance has always been anathema to
  private enterprise. This is why we still have
  the Poor Law principle of less-eligibility.
• Industry-influences ideological political factors
  caused some provinces (esp. Alta and Ont) to
  slash SA benefits and eligibility in order to
  compel the employable to take on onerous
  employmentand to eliminate handouts to the
  undeserving.
• Simultaneously, and as street begging increased
  sharply, Ontario legislated to control both
  street begging and squeegee kids.
• Workfare was introduced, at additional
  administrative cost, in order to facilitate the
  welfare-to-work transition. Many studies prove
  that it seldom succeeded.
• Private enterprise reacted negatively to
  workfare, fearing that it amounted to
  competition consequently, make-work welfare jobs
  tend to be with community agencies questionable
  value in many ways.
• Ottawa changed UI to EI, reducing benefits and
  eligibility, in part so that former welfare
  recipients would not flock to UI.
• Poor Law sentiments are alive and well!

96
Taxation and income distribution

• Government programmes are paid from taxes, or
  sometimes from borrowed money during deficit
  years. Ultimately these services are not free.
• Citizens used to pay. Today consumers pay.
  These are the same people.
• Especially under globalisation, companies pay
  little if any of the tax burden. Intolerable
  corporate taxes businesses leave the country.
• The federal social transfer reductions of the
  1990s gave the provinces fiscal shocks. In some
  cases Ottawa got out of the business altogether,
  leaving it to the provinces.