The Canadian welfare state arose in the 1930s as a response to the poverty of the era, and was bolstered in the subsequent decades to include numerous elements of the social safety net. Prior to the development of the modern Canadian welfare state, the country relied on a classic liberal economic model, with few restrictions on enterprise and the commoditization of labour. Workers had few protections, the central government exerted limited taxation power and provided little in the way of social services. Anderson (1990) argues that Canada constitutes a modern liberal welfare state, one characterized by "means-tested assistance, modest universal transfers and modest social-insurance plans" (p.26). The role of government in such a state emphasizes the promotion of commerce, with social welfare elements often ranking as a lower priority. In the middle decades of the 20th century, Canada shifted more towards a welfare state, instituting elements such as universal health care, subsidized university tuition, and a national pension plan. Other assistance remained means tested and most governments continued to focus their energies towards building the economy. Anderson further argues that "the welfare state caters essentially to the working class and the poor," as opposed to the middle class. The way that the Canadian welfare state has been structured has not delivered as many over benefits to the middle class to encourage them to vote for something more akin to a European model. In Canada, the welfare state model is simply to function as a safety net. The elements of this that benefit the large voting middle class -- the CPP and universal health care -- have been retained by many other elements are resisted by voters (p.31).
The forces that have impacted the development of the welfare state in Canada have been primarily the forces of self-interest among the country's large body of middle class voters. These voters have a model to the south for a lower-tax regime with fewer public services, and they can be envious in particular of the opportunities provided by that higher level of dedication to free market capitalism (Cameron, 1978). Yet, Canadians are intent on retaining the basic elements of a social welfare system, not so much that there will be no poor, but only to the point where a middle class Canadian need not fear, too much, falling out of the middle class. In essence, Canadians are as a culture more risk averse than Americans, so social welfare has some appeal to the voting masses. However, the country's collective work ethic -- derived from Anglo-Saxon Protestant tradition -- makes imperative that individuals not be given too much help. There is a rejection of a Scandinavian-style welfare state, in that hard work is a virtue, implying that the chronically indigent lack this ethic. This can be a powerful force, and it manifests itself in objections to taxation. But the Canadian welfare state is primarily forged from the balance between an expressed admiration for the virtues of free market capitalism and the risk aversion that demands a social safety net remain in place, at least to ensure that one does not slip from the ranks of the middle class.
Part I -- Conceptual Overview
There are a number of developmental models that can be used to assess the changing nature of the Canadian welfare state. Stages heuristics is one framework that can shed light on the processes and influencers that have guided the shifts in Canadian welfare state policy. The stages heuristic breaks down a policy into the problem, the policy options, the implementation, evaluation and any subsequent changes that are made. The stages heuristic can be valuable in understanding the evolution of public policy because this process is undertaken in multiple iterations. A regime might...
More commonly, subsequent regimes may opt to revisit policies that have been put into place. They might filter the evaluation process through their own political lens, or may wish to ensure that the policies are still meeting the needs of constituents in a new time.
This framework aligns fairly well with the concept of punctuated equilibrium. The equilibrium stages are those times when a given policy is not being evaluated, but there are moments when circumstances have changed -- or at the very least that the perception of circumstances having changed holds -- and the result is that the policy comes under the microscope again. Baumgartner and Jones (n.d.) outline the case for punctuated equilibria. This model argues that governments have agendas, that policy monopolies emerge. In Canada, with respect to the welfare state, there is evidence that shifts in such policy monopolies have served to engage the cycle described in the stages heuristic.
In the 1930s, the Canadian welfare state began to take shape. The predominant interest at the time was with the large mass of unemployed and underemployed. They became the policy drivers, and this generation continued to be the policy driver through the decades after World War Two. Baumgartner and Jones note that every group seeks to have a monopoly on public policy, so that their interests can be advanced. The interests of the Canadian public, therefore, should reflect, more or less, the majority interest of each successive voting bloc. A policy monopoly, to the extent that such a thing exists, should have some formality in its nature. It should have "a definable institutional structure" and "a powerful supporting idea associated with the institution" (Baumgartner & Jones, p.7).
The balance of power, where it can be established, breaks up the equilibrium. When a policy is enacted, it goes through the heuristic stages. There is typically an underlying interest that drives implementation, for example, guiding the form that the policy takes. Thus, when the desire for socialized medicine is born, there is a policy monopoly that allows this idea to become manifest in law, and influences how the concept will be implemented. Once a policy is in place, an equilibrium state sets in. It could also be termed inertia -- the situation is stable and difficult to change unless there is some strong, overwhelming rationale.
As the Canadian social welfare system was being built, the wealth of the country was relatively high. Further, Canada was more homogenous back then, and there were prevailing cultural values that acted as constraints for the extent that the social welfare state could be implemented. There were fewer overt interest groups at that time in Canadian politics, but unions were fairly strong, and their influence as a voting block brought social benefits to the realm of public policy. Over time, however, the influence of the unions has waned, bringing changes to the policy monopoly with respect to the welfare state. New interests have emerged -- business interests driven by free market think tanks. These institutions -- be they industry lobbies or groups like the Fraser Institute -- have gained in political power. They are not yet a clear policy monopoly, but they have sought to manifest their ideas in different, smaller ways, while perhaps influencing the dismantling of elements of the social welfare state.
The policy monopoly with respect to the social welfare state still belongs with the Canadian voter. However, this influence is waning, and the voter can no longer be said to have a monopoly. The structure of government being what it is -- the current Prime Minister has the power of a monarch after winning only 19% support of voting-age Canadians -- the political actors are free to allow other influences into policy, to grant monopolies on some areas. There will be no overnight dismantling of the social welfare state, but there is a battle over influence. Unions do not have the power they once did -- arguably squandered on persistent public sector strike that punish the public more than anybody else -- and a more concerted informational campaign from free marketeers has also contributed to a shift in public sentiment. The current state of equilibrium found in the Canadian social welfare state reflects that Canadians are committed to what they have established, but are starting to be more willing to put certain aspects of the social welfares state on the table, should there be a convincing argument to do so. Thus far, the elements that have been challenged have been at the fringe, where a policy monopoly can be achieved -- getting government out of the liquor business in Alberta, reduced funding of the arts, and reduced funding for post-secondary education. But the shift is occurring, as shifts in policy influence have resulted in a repeat of the stages heuristic, leading to old policies being revisited for a little bit of modernization.
Another framework through which the changes in the Canadian social welfare state can be analyzed is the Institutional Model. Institutions have long held significant influence in public policy, because they are able to define issue in a meaningful way for the public. This is important, because as Thelen and Steinmo (1992) point out, "institutional configuration shapes…
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