The Historical Development of Social Security in Canada

1
The Historical Development of Social Security in
Canada

• Pol S 321
• Lecture 2

2
Major Themes
3
Principles

• Residual
• Categorical
• Conditional
• Less eligibility (below minimum wage)

4
Residualism vs. Institutionalism

• - development of alternatives for distributing
  income, goods, and services
• common assumption in 19th and pre-1940s was that
  the family and private market provided relief
• state-sponsored agencies were the last resort for
  relief, and then only on an emergency or
  temporary basis
• concept of residualism

5
Major Themes (cont.)

• the alternative to this viewpoint which was to
  develop during the post-WWII period is the
  institutional concept of welfare
• result of the growing recognition of the risks
  associated with social organization in urban
  -industrial society, and the capacity of the
  state to mobilize to address these problems
• society had an obligation to protect and
  compensate those individuals who bore the costs
  of industrial and urban modernization

6
Social Minimum

• - realization that in a civilized society, there
  is a minimum of conditions necessary to have a
  chance in life
• stems from concerns about child labour and
  minimum wages in Britain and surveys of poverty
  in major U.S. cities at the turn of the century.

7
Redefining Poverty

• - sense that Canada was a land of opportunity of
  strong social security measures were not
  necessary
• - lack of data to either support or refute
  perceptions of underlying social and economic
  condition
• - changed by improved information and increased
  political salience

8
Participatory Democracy

• - increasing public interest in social security
  programs
• - increased benefits, especially those that are
  universal in nature have contributed to this
  increased interest
• - issues of due process, fairness and
  accountability

9
Institutions Fed.-Prov. Relations

• - strong central role originally envisioned for
  central government
• - however, division of powers, judicial
  interpretation and political developments left
  provinces with responsibility for major areas
• - incongruence between revenue-raising power and
  program responsibilities

10
Institutions Fed.-Prov. Relations
11
Historical Overview
12
Pre-Confederation

• - Elizabethan Poor Law Tradition (1601)
• assumption of public responsibility for relief of
  dependent poor, financed and administered by
  local governments
• provide relief for the sick, old, or disabled
  (impotent poor) through almshouses (indoor
  relief) or homes (outdoor relief)
• work for able-bodied poor and punishment
  (workhouses)

13
Pre-Confederation (cont.)

• - Problems with Poor Law system
• thinly-disguised slavery
• cost led local governments to combine different
  categories of recipients into single institutions
  (I.e.. - sick, mentally ill, mentally challenged,
  children, tramps).
• - legislation Nova Scotia 1763 New Brunswick
  1786

14
Pre-Confederation (cont.)

• - Early Trends
• small rural parishes in N.B.. contracted out to
  the lowest bidder
• some areas held an annual auction of paupers
  (slavery)
• by mid-19th C. public institutions in larger
  centres and outdoor relief
• pre-1865 - almshouses served as hospitals

15
Pre-Confederation

• - Upper Canada
• 1792 legislation in U.C. didnt include poor law
  provisions (opposition to taxation and increased
  local govt power)
• focus on private sector
• jails were used as the initial catch-all
• provincial asylum established in 1850
• some public funds provided -destitute/sick

16
Pre-Confederation (cont.)

• - Lower Canada
• French Catholic tradition assigned primary role
  for health, education and welfare to the Church,
  not the state
• facilities were built and operated by the Church
  and supplemented by weekly begging and donations
  from congregations

17
Pre-Confederation

• - Western provinces
• responsibility for provision of relief fell
  mainly to provincial governments except where
  local governments were organized

18
Post-Confederation

• - factory system sprang into being almost
  overnight
• - rapid urbanization
• - Royal Commission (1887)
• unanimous condemnation of certain aspects of the
  factory system 50-60 hr./wk. low pay workplace
  safety underemployment/unemployment

19
Working Conditions

• - factory doors locked
• - physical discipline of child workers
• - financial penalties for sub-standard work,
  breakage, laughing and talking, or lateness
• - industrial carnage loss of limbs

20
Conditions (cont.)

• anti-unionism
• attempts to establish unions were countered by
  blacklisting and intimidation
• wage -discrimination against women
• generally 50 that of men and insufficient to
  let them live independent of their family
• poor housing conditions
• poorly constructed
• poor sanitation
• exorbitant rents

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Post-Confederation (cont.)

• - Commission recommendation
• federal govt establish an annuity system to
  allow workers to save for their old age
• only recommendation acted upon was the creation
  of the proclamation of Labour Day

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Social Minimum(cont.)

• - Establishment of Social Minima
• increased public concern
• needs of employers to access cheap/trained labour
  force
• concerns with public health
• extension of the franchise
• improved information on social conditions

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Social Minimum(cont.)

• - Education
• access to cheap labour force and method of social
  control
• 1850 - 1870s - primary education in Ontario,
  B.C., Manitoba and P.E.I., became free
• free public libraries were fairly common by turn
  of the century

24
Social Minimum

• - Health Care
• ad hoc public health at local level to deal with
  emergencies
• development of provincial health boards (Ontario,
  1882)
• federal department in 1919

25
Take 15
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Post-Confederation (cont.)

• - Legislation
• 1880-1886 seven bills introduced at federal level
  - none passed in part to pressure from some
  employers groups
• - Extension of Franchise
• 1920 - Dominion Elections Act granted universal
  suffrage to men and women in federal elections
  although natives and other visible minority
  groups were still out

27
Post-Confederation (cont.)

• - improved research
• Ames study - ordinary urban conditions within a
  square mile of Montreals working class district
  - 38,000 households (1897)
• findings overcrowding definition of poverty
  line
• modern analysis of the Ames study suggests that
  73 of working class lived at or below the
  poverty level of the day

28
Post-Confederation (cont.)

• - Reform Movements
• urban reform focused on public control of
  utilities improved sanitary conditions (city
  healthy) improved purity in government (city
  efficient) improved aesthetics efficiency in
  government (city beautiful)
• social gospel movement Lords Day Act (1906)
  Social Service Council of Canada Govt
  Annuities Act (1908)

29
Post-Confederation (cont.)

• - Legislation
• Ontario
• Factories Act and Employers Liability Act
  (1884/86)
• est. safety requirements,limits to hours worked,
  and employment of children
• weakened the legal defense os employers of
  assumed risk and negligence
• Workmans Compensation Act (1914)
• first piece of social insurance (see hand-out )

30
Post-Confederation (cont.)

• Govt Annuities Act 1908
• government operated annuities as a means of
  overcoming the inadeqaucies of the private market
• Quebec - Workmens Comp. Act 1909
• schedule of benefits payable provided negligence
  was not involved
• not compulsory, contributory negligence upheld

31
Two Wars and a Depression

• - Impact of WWI
• rise of the political left due to growing social
  unrest
• Winnipeg General Strike (1919), electoral
  successes of populist farm movements in elections
  at the provincial level, and election of 65
  progressives at the federal level in 1921
• Mothers Pension Act passed in B.C. (1920)

32
War and Depression (cont.)

• - Canadian Council on Child and Family
• reviewed the act in 1931
• residual attitude - better to punish deserting
  husbands, unmarried mothers give up children
• led to a significant cutback in services

33
War and Depression

• - 1920s (see handout)
• establishment of federal health department in
  1919
• minimum wage legislation
• old age pension
• family allowances

34
War and Depression (cont.)

• - Depression
• one-quarter of population unemployed by 1933 (15
  on relief)
• pick and shovel make work projects
• in-kind and voucher systems
• relief was considered a local responsibility
• federal support came in the form of annual
  emergency appropriations (40)

35
War and Depression (cont.)

• - Depression
• Unemployment Insurance Act (1935)
• originally declared ultra -vires by the JCPC
• Royal Commission on Fed/Prov. Relations
  recognized the emerging substantial roles of the
  provinces in social security without financial
  resourceslogic of federal role in income
  maintenance concept of national minimum of
  social services

36
War and Depression

• - WWII
• 1941 -committee on post-war reconstruction
• Cassidy Report on Social Security (1943) called
  for a comprehensive social security system
  including a standard of living floor
  unemployment disability illness death
  training and placement

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Role of Ideas

• Keynesian Economics
• Anyone who wanted to work could because full
  employment was the norm
• If an extended period of unemployment emerged,
  governments could correct this by spending to
  stimulate the economy

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Role if Ideas

• Beveridge Report
• - public assistance and means-tested aid could
  be eliminated through comprehensive social
  security
• Universal health service, universal childrens
  allowance, comprehensve social insurance to
  address life interruptions and maternatty and
  funeral grants

39
Report on Social Security for Canada (Marsh
Report -1943)

• - Derived from the Rowell-Sirois Commission
  (1937-1940)
• - National employment and investment program to
  maintain full employment
• - Expanded system of social insurance protection
  federally administered to protect workers from
  risks of income interruption
• - Social insurance program to protect employed
  from universal risks, old age, permanent
  disability, death
• -Comprehensive health insurance including
  medical, dental, pharmaceuticals, optometrists,
  jointly financed and contributory
• -Universal family allowances

40
Marsh Report

• The genius of social assistance is that it
  enlists the direct support of the classes most
  likely to benefit, and enlists equally the
  participation and controlling influences of the
  state, at the same time as it avoids the evil of
  pauperization, and the undemocratic influence of
  excessive state philanthropy

41
Post-WWII

• - 1950s and 1960s
• Old Age Security Act (1951)
• special provisions allowed Quebec to opt-out
• Unemployment Assistance Act (1956)
• CAP (1966)

42
The 1960s The Last Hurrah ?

• - CAP (1966)
• consolidation of all fed/prov programs based on
  means or needs tests into a single, comprehensive
  program for benefits to meet financial need
  regardless of cause (old age assistance, blind
  persons allowance, and disabled persons
  allowances, along with other single category
  programs)
• services to allow maintenance of independence

43
CAP Continued

• - 50/50 cost shared assistance for needy mothers
  and dependent children, homemaker services, home
  support, and other services for families in need,
  children in the care of welfare agencies,
  protective services for children, and adoptive
  services
• - costs include basic requirements for
  food,shelter,clothing,fuel,utilities ...

44
Boy - The 60s was a generous time compared to
the 90s

• - additional services covered homemakers
  services, home support and other family related
  services
• - 1990 - Federal Government imposed a 5 ceiling
  on the annual growth rate of CAP contributions to
  the non-equalization receiving provinces
  (Ontario, Alberta and B.C.).

45
Movement Towards a GAI

• - External Forces
• oil crises (1973 and 1979)
• slowed economic growth
• increased size of labour force
• - Internal Forces
• impact of technological change (changes in
  employment patterns
• emergence of working poor
• focus on poverty

46
Movement Towards a GAI

• - Reform of Unemployment Insurance Plan (1970-71)
• attempt to reshape an existing program (to enrich
  and broaden the UI plan and introduce some
  principles of GAI
• in essence - government proposed to make UI a
  near universal program and increase benefits from
  40 to 66
• widening of eligibility to include childbirth and
  sickness, 65

47
Reform of UI

• eligibility also extended to cover short term,
  intermittent, non-continuous workers
• qualifying periods shortened to as 8 from 52
  weeks
• benefit period extended from 36 to 51 weeks
• extended benefits for high unemployment areas
• costs of program were 3 X original estimates by
  1975

48
The Social Security Review (1973-1976)

• - Working Paper on Social Security (1973) -five
  strategies employment (near-universal income for
  employment) social insurance(contributory as
  first line of defense) income supplementation
  (top-up of basic employment and social insurance)
  for unemployables employment and social services

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Social Security Review

• - principles good and successful social security
  depends on successful economic policy (near full
  employment) good and successful social security
  turns on an effective income support and
  supplementation system

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The Ministers Meet

• - The Plan was approved in principle, but never
  implemented because of misgivings from some
  provinces about the federal commitment to cover
  additional costs apprehension about support from
  provincial finance ministers and the uncertainty
  of the economy

51
Fallout from the Social Security Review

• - no income supplementation plan was introduced
  for the working poor (beyond Family Allowance)
  and no GAI introduced
• - however, Sask est. the family Income Plan
  (1974), Manitoba - Income Support Program (1980),
  Quebec, Income Supplement Program (1979), Feds -
  child Tax Credit (1978)

52
Shortcomings of the Review

• - arbitrary and unilateral nature of federal
  decisions (lack of provincial consultation)
• - recurring federal/provincial squabbling
• - economic downturn

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EPF This is the End

• - Established Programs Financing Act (1977)
• response to economic downturn, rising world oil
  prices and growing fed/prov friction
• federal withdrawal from 50/50 cost shared
  arrangements for health and PSE
• replaced by an unconditional block grant based on
  cash and tax transfers (13.5 points)
• 86/871990 GNP -2, 89/90 GNP -3, 90/91 froze.

54
Child Benefit Program

• Federal govt announced 600 million in 97 budget
• National Child Benefit initiative launched in
  1998
• Provinces have used the funding for different
  initiatives
• feds add an additional 425 million in 1999

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Source Gerald Boychuk, Reforming the Canadian
Social Assistance Complex The Provincial Welfare
States and Canadian Federalism, in Canada The
State of the Federation, 1994
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http//prestationnationalepourenfants.ca/ncb/ncb_e
19.html
57
http//prestationnationalepourenfants.ca/ncb/ncb_e
19.html
58
(No Transcript)
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Universal Child Care Benefit

• The Universal Child Care Benefit provides
  financial assistance to Canadian families with
  young children. Parents receive 100 a month up
  to 1,200 a year for each child under six.
• 250M each year to provinces and territories to
  support their priorities for child care spaces
• a 25 per cent investment tax credit is available
  to eligible businesses that create new child care
  spaces in the workplace, to a maximum of 10,000
  per space created.

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Summary

• Residualism vs. institutionalism
• Social minimum
• Redefining poverty
• Federalism
• External events

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Further Information

• http//prestationnationalepourenfants.ca/ncb/libra
  ry1.shtml2002
• http//www.sdc.gc.ca/en/gateways/nav/top_nav/progr
  am/isp.shtml
• http//www.universalchildcare.ca/en/find_out/backg
  rounder.shtml