How Does Canada’s Welfare State Measure Up?

The Canadian welfare system follows what is called the liberal-residual model. In addition to a publically funded universal health care system, taxpayer financed social services are available to those who meet eligibility requirements. Canada’s poverty rate has steadily declined since the 1990s and unemployment was falling until the 2008 financial meltdown. On the whole, the Canadian welfare state has better served low-income Canadians than its American counterpart. Yet, while privatized to a lesser extent than the United States, welfare is still a last resort in Canada; in other words, policies are geared towards dissuading working-aged people from relying on state assistance. There are areas in which Canada can and, indeed, must, improve in its provision of social assistance.

In order to assess how Canada’s welfare state stacks up in the world, we must first examine the provision of social services in other prominent industrial democracies. The French system is corporatist. The provision of social services, including health care and other benefits like pensions, is dependant on occupation and is thus highly variable across professions. Youth, the unemployed, immigrants and low-income individuals in general experience the short end of the stick. The high wages and job security of middle and upper class French citizens have come at the expense of the withdrawal of several million people from the labour market working in low-wage, insecure sectors.

The Scandinavian welfare state is the most egalitarian and universal system. Whereas in France solidarity is paid lip service by politicians and other insiders of the corporatist system, a measure of solidarity is actually embedded in Sweden and other Scandinavian welfare states. Largely due to high income taxes on the wealthiest citizens, social services are provided to almost all citizens on equal terms. The result has been low unemployment, low levels of income inequality, low poverty rates, an extensive public housing programme, and high female participation in the public sector. Scandinavian leadership has also recognized the need to regularly reconfigure the country’s welfare state in order to adapt to changing global economic conditions. Reforms have included the introduction of more part-time work, some cuts to government spending, and partial privatization of health care.

Like Canada, the United States also follows the liberal-residual model. However, the countries differ greatly in crucial areas including the provision of health care and levels of economic inequality. Inequality grows ever higher in the United States, and the American welfare state has not responded well to global financial hardship. American workers, particularly those in the manufacturing and service industries, suffer from the effects of outsourcing to countries with large, cheap labour pools in the Global South. The American system has also been characterized by the deregulation of labour and financial markets, de-unionization, the scaling back of corporate taxes and other laissez-faire measures aimed at reducing government spending. Whereas in Scandinavia the public purpose is geared towards poverty reduction, in liberal-residual countries like the United States the goal is economic growth.

As in the United States, welfare is considered a last resort in Canada. In the 1990s the employment rate in Canada rose in large part because welfare was made less accessible among able-bodied, working-aged people. Further, social workers began to more carefully distinguish between persons with disabilities and those who are “expected to work”.

Poverty indeed declined in Canada from the 1990s onwards, as incomes rose among groups vulnerable to poverty including children, female lone-parent families and non-elderly, unattached men and women. The increase in income appears to be due in large part to the decline in “no earners” among these groups, strengthening the indication that there is a correlation in Canada between poverty and employment rate as more Canadians secure jobs rather than welfare benefits.

Despite welfare reforms that have reduced poverty in Canada, there remain a number of groups who have yet to benefit from the Canadian welfare state. Aboriginal Canadians and people who face mental health and physical (dis)ability challenges are particularly vulnerable. On-reserve poverty rates are particularly distressing, and communities like Attawapiskat in Northern Ontario have received much media attention for their atrocious housing conditions and food security. In May 2012, Canada received international attention when the United Nations special rapporteur on food criticized food security in Canada, particularly among Aboriginal Canadians. The official also pointed to rising food bank use as a “symptom of failing social safety nets.”

Food security in communities in the Canadian Arctic is particularly worrisome. In the last two years a Facebook group and website sprung up entitled “Feeding My Family”. The group and site aim to shed light on the sky-high cost of food items in the Arctic, particularly Nunavut. Many communities in Nunavut are inaccessible by land, and food staples must be flown in. The cover page of the page draws attention to a 900g package of spaghetti being sold for $13.39. As of this month, the Facebook group has almost 20,000 members and is visited by a diverse group of indigenous peoples, southern Canadians, students, researchers and other interested individuals.

The Canadian welfare state is more favourable to disadvantaged groups than the French corporatist model or its counterpart in the United States. However, a number of groups, perhaps most notably Aboriginal Canadians, remain vulnerable to poverty. Canadian policy-makers would benefit from adopting the Scandinavian attitude towards the welfare state, namely recognizing and acting on the need to continually adapt to changing economic and social conditions. Welfare and other reforms will be essential to addressing pressing poverty issues, including food security in the Canadian North.