Social Policy by Stealth

By Grammer, Hilary | Canadian Dimension, June 1991 | Go to article overview

Social Policy by Stealth


Grammer, Hilary, Canadian Dimension


Despite its far-reaching impact, Bill C-69, candidly entitled An Act To Amend Certain Statutes to Ensure Restraint of Government Expenditures, slid quietly through the House of Commons during the summer of 1990, while Canadians were riveted to the Meech Lake and Oka crises. It received Senate approval on January 29, 1991, immediately following the rather spectacular defeat of Canada's proposed abortion legislation, at a time when Canadians were still reeling from the initial impact of the GST.

Bill C-69 will phase out the Federal cash contribution to Established Programs Financing (EPF), which funds health care and post-secondary education, and will, by means of a cap on funding, undermine the effectiveness of the Canada Assistance Plan (CAP), which funds welfare assistance and social welfare programs. This will adversely affect the accessibilitly and quality of these now universal services, and will further erode the fragile ties which bind Canadians together.

These were ke concerns expressed by opponents of the Meech Lake Accord. They were voiced again in response to the more radical federal-provincial disentanglement proposal advanced by British Columbia in 1990. The B.C. proposal would have each province collecting its own taxes and exercising complete control over social programs now covered by federal-provincial cost-sharing agreements.

The adverse public reaction to these proposals suggests that decentralization and the inevitable erosion of services that will follow are opposd by most Canadians. And yet, while the Meech Lake Accord has been defeated, and B.C.'s horrendous vision of a disentangled federalism remains a mere proposal, Bill C-69 is a 'fait accomplis'. By employing the subteties and technicalities of fiscal means, the federal government is syphoning billions of dollars from social policy areas while generating little public response. Critics are using the phrase 'social policy by stealth' to describe this approach--of which Bill C-69 is but one, albeit a major, part.

Having had the front doors slammed firmly in its face in the form of public rejection of the constitutional route to decentralization and erosion of services, the federal administration is now opting for the fiscal 'back door'.

Federal role in social

programs

Canada could never have attained the current level of social services and opportunities, imperfect though they may be, without the substantial involvement of the federal government since World War II. In fact, fiscal disentanglement was rejected in the immediate post war years because -- quite correctly -- it was seen as being counterproductive to achieving the quality and uniformity of services desired by Canadians. Instead, extensive federal-provincial collaboration was opted for -- with the federal component of funding being contingent on provincial compliance with national standards or principles. While this collaboration has had its share of flaws, it has addressed the provinces' revenue-responsibility mistmatch -- i.e., the fact that provinces have constitutional responsibility for high cost items like health, education, and social services, while most provinces don't have the revenue to pay for them. Bill C-69, along with its recent 'budget chaser', will effectively undo this.

Established Program

Financing

The National Council of Welfare, and Winnipeg health and education consultant Tim Sale (see CD, Vol. 25 No.2) have both released projections showing how 'incremental' cuts since 1985, the provisions of Bill C-69, and recent budget measures, will all combine to oversee the demise of EPF. As Table 1 makes evident, should the current trend continue, federal cash contributions to health and higher education will be a thing of the past well before 2010.

While cuts to the EPF formula have been perceived as incremental and hence have generated little public outcry, the real costs to the provinces are staggering due to their 'cascading' effect over time. …

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