The welfare state and Canadian federalism

276 Pages·1987·12.962 MB·English

by  Keith G Banting

The Welfare State and Canadian
Federalism
Second Edition
Like all advanced countries, Canada has developed a complex welfare state.
But, unlike many, it has done so within a federal system with strong
governments in Ottawa and the provinces. How federalism has affected the
development and operation of Canadian social security policies is the
subject of this compelling book.
The Welfare State and Canadian Federalism documents the role of the
federal and provincial governments in providing the basic building blocks
of the modern welfare state, paying particular attention to income security.
Keith Banting examines the origin, operation, and consequences of
programs designed to raise the living standards of lower-income citizens
and to protect Canadians against losses in earning power, whether from
illness, accident, unemployment, family responsibilities, or old age.
In addition to providing a lucid description of the character and scope of
Canadian income security policies, Banting presents an impressive analysis
of the impact of our political institutions on this important sector of public
policy. In doing so, he compares Canada's performance with that of other
industrialized countries and discusses such complex issues as the effect of
economic forces, cultural traditions, and political dynamics on the scope
and content of social policy, and the implications of federalism for income
redistribution in Canada.
The first edition of The Welfare State and Canadian Federalism focused
on the impact of federalism on social policy during a period of economic
growth and expanding social expenditures. The revised edition extends the
analysis by asking how the federal system has shaped the social policy
response to neo-conservatism, recession, and restraint during the 1980s.
Banting analyses policy trends in detail, examines the implications of consti-
tutional changes such as the Charter of Rights and the Meech Lake
Accord, and highlights the ways in which the federal system has con-
strained the influence of economic crisis and ideological change on social
security in Canada.
Keith G. Banting is a member of the School of Public Administration,
Queen's University.
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Keith G. Banting
The Welfare State and
Canadian Federalism
Second Edition
McGill-Queen's University Press
Kingston and Montreal
© McGill-Queen's University Press 1987
Second edition
ISBN 0-7735-0630-6 (cloth)
ISBN 0-7735-0631-4 (paper)
Legal deposit 4th quarter 1987
Bibliotheque nationale du Quebec
First edition, 1982, published in conjunction with the Institute of
Intergovernmental Relations, Queen's University.
Canadian Cataloguing in Publication Data
Banting, Keith G., 1947-
The welfare state and Canadian federalism
2nd ed. Includes index. Bibliography; p.
ISBN 0-7735-0630-6 (bound)
ISBN 0-7735-0631-4 (pbk.)
1. Income maintenance programs — Canada.
2. Social security — Canada. 3. Federal-provincial relations —
Canada. 4. Canada — Social policy. I. Title.
HC120.I5B36 1987 354.710082'56 C87-090196-6
For my parents
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Contents
Preface / xi
1. Introduction / 1
PART ONE
INCOME SECURITY
2. The Canadian Income Security System / 7
3. Political Institutions and Income Security: Comparative
Perspectives / 31
PART TWO
FEDERAL INSTITUTIONS AND INCOME SECURITY
4. The Constitutional Division / 47
5. Centralization and Expansion in Income Security / 59
6. Centralization and Redistribution / 83
7. The Policy Process and Income Security / 109
PART THREE
INSTITUTIONAL CHANGE AND INCOME SECURITY
8. Regionalism and Income Security / 125
9. The Consequences of Constitutional Reform / 147
PART FOUR
CONCLUSIONS
10. State Structures and Policy Patterns / 171
11. Income Security and Federalism in the 1980s / 183
Notes / 215
Bibliography / 241
Index / 259
vni Contents
Tables
1 Public Welfare Expenditures in OECD Nations: Percent of GDP in
current prices, 1974 or Near Year / 2
2 Distribution of Social Assistance, by Age of Recipient and Reason for
Assistance, 1971 / 10
3 Social Assistance Levels by Province and Family Size, 1980 / 12
4 Maximum Benefits from Federal Programs for the Aged and Provincial
Supplements, 1980 / 14
5 Child Tax Credit Benefits Payable, 1981 / 16
6 Expenditure on Major Income Security Programs, 1964-78 / 18
7 Growth in Income Security Expenditures, 1964-78 / 19
8 Proportion of Paid Workers in Labour Force Covered by Occupational
Pension Plans, by Industry / 23
9 Contributors to Occupational Pension Plans, by Income Group,
1977 / 23
10 Tax Savings Resulting from Deduction of Contributions to
Occupational Pension Plans, 1974 / 24
11 Contributors to RRSPs by Contributor's Annual Income, 1976 / 25
12 Number of Recipients of Major Income Security Programs,
1971-76 / 26
13 Composition of Income of Families and Unattached Individuals by
Income Groups, 1978 / 28
14 Expenditure on Main Items of Income Maintenance, 1972 or Near
Date / 35
15 Provincial and Federal Securities Purchased by the Canada Pension
Plan Investment Fund / 71
16 Distribution of Income of Families and Unattached Individuals by
Quintiles, 1951-78 / 84
17 Index of Per Capita Personal Income, by Province, 1964-78 / 86
18 Low Income in Canada, 1978 / 87
19 Inter-regional Redistribution through Government Programs, United
Kingdom, 1964 / 89
20 Average Monthly Benefit Levels under Provincial Programs,
1938-49 / 91
21 Family Allowances and OAS-GIS Related to Regional Living
Standards, 1974 / 92
22 Ranking by Province of Real Per Capita Expenditures on Social
Welfare / 95
23 Beneficiaries of Federal Income Security Programs as a Proportion of
Population, Canada and Provinces, 1976 / 98
24 Index of Income Security Payments Per Capita, by Province,
1970-78 / 100
25 Income Security Payments as a Proportion of Total Personal Income,
by Province, 1964-78 / 101
26 Membership of Occupational Pension Plans as a Proportion of
Population, Canada and Provinces, 1970-78 / 103
Contents ix
27 Net Inter-regional Redistribution through Federal Income Security
Programs, 1976-77 / 104
28 Net Inter-regional Redistribution, 1976-77: Income Security and
Equalization / 105
29 Public Opinion on Universal Old Age Pensions, 1946-51 / 112
30 Social Assistance Expenditures as a Proportion of all Provincial and
Municipal Current Expenditures, 1964-78 / 114
31 Attitudes Towards Unemployment Insurance, 1977-78 / 128
32 Attitudes of Family Allowance Recipients, by Region, 1974 / 129
33 Attitudes Towards Old Age Pensions, by Region, 1974 / 130
34 Attitudes Towards Unemployment Insurance, by Region, 1977-78 /
131
35 Awareness and Approval of UIC Changes, by Region, 1977-78 / 132
36 Support for Greater Income Redistribution, by Region, 1977 / 133
37 Attitudes Towards Inequality and Redistribution, by Region,
1977 / 133
38 Attitudes Towards Social Policy, by Region, 1951-75 / 134
39 Attitudes Towards Social Policy Jurisdiction / 136
40 Monthly Benefits to Social Assistance Recipients, by Province,
1982-85 / 190
41 Number of Recipients of Major Income Security Programs,
1976-85 / 193
42 Transfer Payments as a Proportion of Total Income, by Quintile,
1971-84 / 194
43 Income Transfers as a Proportion of GDP in OECD Nations,
1981-84 / 195
44 Income Distribution for Families, by Quintile, 1981-84 / 196
45 Centralization of Income Security Expenditure, 1972-84 / 201
46 Inter-regional Transfer as a Proportion of UI Expenditures, by
Province, 1975-79 / 209
Figures
1 The Public Income Security System / 8
2 Growth of Occupational Pensions in Canada, 1960-76 / 20
3 Book Value of Pension Fund Assets as a Proportion of GNP, by Type
of Plan, Canada, 1962-77 / 22
4 Industrialization and Welfare / 33
5 Degree of Centralization of Income Security Expenditures, 1964-78 / 55
6 Index of Government Income Security Payments Per Capita, by
Region, 1953-78 / 99
7 Distribution of Occupational Pension Plan Members between Public
and Private Sectors, by Province, 1978 / 102
8 Projection of Child Benefits in 1990, before and after 1985 and 1986
Budgets / 188