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"History and Prospects of the
Canadian Social Union"
Notes for an address to the Canadian Club
Ottawa, Ontario
November 18, 1996
The defenders of Canadian unity in Quebec and elsewhere have been accused,
sometimes correctly, of reducing the case for Canada to a merely economic
argument. While there is indeed a powerful economic argument for Canadian unity,
it is true that this is not the whole story. There is far more to Canada than
trade balances and interest rates, and the other arguments must also find their
voice. Today, over a year after the trauma of the last referendum, I would like
to focus on another of the most important arguments for Canadian unity, namely
the strength of the Canadian social union.
One of Mr. Bouchard's arguments during last year's referendum campaign was
that Canada had abandoned its traditions of promoting social justice and
generosity towards those in need. According to Mr. Bouchard, there was a
"cold wind from English Canada" -- from Alberta, from Queen's Park,
from Ottawa -- that was leading to a crueller, harsher Canada, and that only in
an independent Quebec could generous social programs be maintained. Today, as
Lucien Bouchard has become Premier Bouchard, and has discovered that he too must
balance the desire to preserve the social safety net against the need to be
responsible with public finances, we may question the validity of his argument.
Getting our economic house in order does not contradict the goal of preserving
our social contract. In fact, the one is a prerequisite to the other.
Now that the federal government, under the leadership of Prime Minister Jean
Chrétien and Finance Minister Paul Martin, has made tremendous progress towards
putting Canada's economy back on a sound basis, the Government, in cooperation
with the provincial governments, will increasingly focus on the renewal of
Canada's social union. The social union talks with the provinces, led on the
federal side by my colleagues Pierre Pettigrew and David Dingwall, will lead to
a reshaping of Canada's social programs as we enter the 21st century. This will
not be simply an exercise in cost-cutting or division of powers between
governments, but in focussing all government programs, federal or provincial, on
a common objective: providing a better quality of public service that meets the
genuine needs of people. And the principles and values that will guide this
process will be the same principles that have guided Canada over the past
decades in creating one of the most generous systems of social benefits in the
world.
Today, I would like to talk about the values and principles that have guided
Canadians in creating our social union, and to discuss the history of the
development of our social union from Confederation to today. For only with a
clear understanding of what our common convictions are and of where we have come
from will we be able to create a renewed social union that builds on the
strengths of the past in responding to the challenges of the future.
The Values of Canada's Social Union: Solidarity and Subsidiarity.
What then are the core values that have guided Canadians and their
governments in the creation of Canada's generous social system? I believe that
if we examine the history of Canada's social development, we can identify two
key principles at work, and a constant search for balance between them. These
are the principle of solidarity and the principle of subsidiarity. I have talked
elsewhere about these two principles of solidarity and subsidiarity, but as I
think they are particularly relevant to the social union aspect of the Canadian
federation, I would like to expand a little on where these principles of
solidarity and subsidiarity come from and what they mean.
The use of this terminology is fairly new, borrowing from recent debates
within the European Community. But it is fair to say that the development of the
Canadian social union is one of the best examples of the search for balance
between the principles of solidarity and subsidiarity to be found in the world.
Indeed, like Molière's Bourgeois Gentilhomme who spoke prose all his life
without even knowing it, Canada has been practising solidarity and subsidiarity
ever since Confederation without knowing it.
Solidarity is a word most associated historically with the labour movement.
One thinks of the union hymn "Solidarity Forever" or the struggle of
the Solidarity trade union in Poland. To be in solidarity with one's fellow
citizens means to have compassion, especially for the less fortunate, and to
provide aid to those in need. But it is more than merely a sense of pity or
charity, it is a sense of mutual responsibility. Being in solidarity means
sharing a sense of common belonging and common good. Canadian solidarity means
that all citizens in all regions of Canada feel part of a greater whole. To
borrow another phrase from the trade union movement, when we are in solidarity
with others, "an injury to one is an injury to all."
We saw the spirit of Canadian solidarity at work in the aftermath of the
Saguenay floods earlier this year. The outpouring of voluntary, spontaneous
support from ordinary citizens from within Quebec and also from all parts of
Canada for the victims of the flood was marvellous evidence that Canadians from
coast to coast feel that we are part of a common whole, that we share a sense of
solidarity.
Governments, when they act to support citizens and regions which need help,
give formal expression to this sense of solidarity among citizens. But
solidarity, the belief in mutual responsibility and support for the less
fortunate, does not mean that we must create a nanny state, where central
government provides for all human needs. Indeed, the best way of helping others
can often be to let them help themselves.
This is why solidarity must be balanced by respect for the principle of
subsidiarity. Subsidiarity is a less familiar term which comes originally from
Catholic social teaching of the 1930s, but which is now used broadly in
discussions of governance in Europe and elsewhere. It means essentially that the
State must respect the legitimate autonomy of individuals, families,
communities, and more local levels of government and help them in fulfilling
their own responsibilities, rather than taking them over. To quote from its
classic definition by Pius XI, "It is a fundamental principle of social
philosophy... that one should not withdraw from individuals and commit to the
community what they can accomplish by their own enterprise and industry. So,
too, it is an injustice... to transfer to the larger and higher collectivity the
functions which can be provided for by lesser and subordinate bodies."
This principle of subsidiarity has become a key concept in the formation of
the European Community. The Maastricht Treaty on European Union of 1991 states
that: "the Community shall take action, in accordance with the principle of
subsidiarity, only if and insofar as the objective of the proposed action cannot
be sufficiently achieved by the Member States and can therefore, by reason of
the scale or effects of the proposed action, be better achieved by the
Community." Today, as the European Community moves from being a mere free
trade area to a fuller economic, social, and political union that unites
sovereign countries within federal institutions, Europeans are debating today
precisely the question that we have faced over the last century, as Canadians
worked to create a strong national identity in the context of a federation with
strong provinces: how to reconcile a spirit of solidarity with respect for
subsidiarity.
In Canada, our federal system is the primary means we have used to reconcile
solidarity with subsidiarity. Federalism allows us to share in a common
citizenship with common national goals and objectives, but also means that we
respect the autonomy and diversity of the constituent units of the federation,
namely the provinces and territories.
The History of the Canadian Social Union
Canadian federalism has been a dynamic system. It has evolved considerably
over the years, at times more centralized, at other times more decentralized, at
times emphasizing solidarity, at other times subsidiarity. There has been no
status quo in Canadian federalism, no constant, but rather ceaseless change.
Nowhere is this more true than in the development and evolution of our
Canadian social union. Let me briefly explain how our social union has evolved
over the years as Canadians have moved to act in solidarity while respecting
subsidiarity.
Canada in 1867 did not have an extensive system of social programs.
Governments concerned themselves primarily with essential public infrastructure
such as railroads and postal services. Under the British North America Act of
1867, education was an exclusively provincial jurisdiction, which was especially
important for Quebec in order to preserve its distinctive linguistic and
religious identity. But in the main, the provision of health, education, and
social assistance was not a state matter, but was left to private individuals,
communities, charities, and religious bodies, with the provinces playing an
overseeing role. As the Canadian economy grew and expanded, this system seemed
to work fairly well. The subsidiarity not only of provinces, but of the local
community, was fully respected, while a spirit of solidarity moved the citizens
of a rich and growing nation to give generous charitable support for the locally
run network of social services.
But with the Depression of the 1930s, the economic and social crisis led many
to call for government to take on some of these social functions to help those
most in need. The first and most pressing demand was for some form of
unemployment insurance to help those dislocated by the upheavals of the
Depression. In 1935, the Conservative government of R.B. Bennett tried to
respond to the economic crisis with a sweeping Employment and Social Insurance
Act. But several provinces objected, and the Act was found to be beyond federal
powers by the courts in 1937. So from the beginning, accommodation between
solidarity and subsidiarity had to be found in building Canada's social
programs. The King government negotiated with the provinces and, with the
unanimous consent of the provinces, amended the Constitution in 1940 to allow a
federal role in Unemployment Insurance and introduced a new Unemployment
Insurance Act in 1941.
Other social initiatives followed a pattern of cooperation between federal
and provincial governments and emulation among provinces to gradually create the
network of programs Canadians enjoy today. For example, Saskatchewan introduced
Hospital Insurance in 1947. It was followed by British Columbia and Alberta in
1949. Then in 1957, the federal government offered to share costs with provinces
that introduced similar programs, and by 1959, citizens in every province
enjoyed emergency Hospital Insurance -- a great example of the flexibility of
the federal system in balancing solidarity and subsidiarity, contributing to the
common good of all Canadians. Similarly, with the later introduction of
universal Medicare, Saskatchewan led the way in 1961, with other provinces
joining in a jointly funded federal-provincial program over the next ten years.
The Canada Pension Plan is another example of successful emulation and
cooperation. Ontario introduced its Pension Benefits Act in 1963, regulating and
requiring mandatory contributions to private plans. The federal government
called for a national government-run pension program in 1965. Quebec expressed a
desire to have a separate, but comparable, program, and thus by 1967 a national
Canada Pension Plan and a parallel Quebec Pension Plan were put in place.
This is the story of social policy in Canada: creativity and innovation at
the provincial level, which leads to cooperation on a national basis, a skilful
balance of the two principles of solidarity and subsidiarity. It is to this same
flexibility and creativity that we must appeal today as governments begin to
think about how to reorient Canada's social programs for the 21st century.
Quebec and the Development of the Social Union
Movement towards a comprehensive review of social programs on both an
interprovincial and federal-provincial basis is now underway. The
interprovincial Ministerial Council on Social Policy report this spring had some
interesting suggestions on social policy. The federal-provincial forum being
chaired by Pierre Pettigrew and Stockwell Day, Alberta's Minister of Family and
Social Services, will provide the opportunity to discuss these and other
suggestions to improve our social union.
Unfortunately, the Province of Quebec has chosen not to be a full participant
in these efforts. At the Jasper meeting of the premiers, Premier Bouchard tried
to justify this non-participation on the basis of Quebec's traditional
constitutional positions, saying that "it's a historical stand of Quebec
premiers not to accept any intrusion from the federal government, or from the
provinces, into Quebec's jurisdictions, namely into social programs."
But an examination of the historical record shows a more nuanced picture. It
is true that all Quebec provincial governments, of whatever partisan stripe,
have insisted on the maintenance of provincial autonomy and protection of the
constitutional jurisdiction of the provinces in social policy. But there is also
a history of pragmatism and cooperation working within the constitutional
framework between Ottawa and Quebec City on social policy going back to the
1930s in order to ensure the best quality of service to citizens.
For example, Premier Duplessis accepted the necessity of a federal system of
Unemployment Insurance in 1937 due to the length and depth of the Depression,
stating that this would not infringe on provincial jurisdiction. Adélard
Godbout consented to the constitutional amendment for Unemployment Insurance in
1940, and was open to an increased federal role in social policy during the war
years. In 1959, Premier Paul Sauvé stated that Quebec had no constitutional
objections to a federal system of hospital insurance. The Lesage government
stated its preference in the social sphere for Quebec-run programs with
compensation instead of cost-shared programs, and was able to arrange with the
Pearson government for federal compensation to run separate pension and student
loan programs compatible with the objectives of the national programs. These are
all positive examples of pragmatic, cooperative federalism at work to create
programs that expressed a pan-Canadian sense of solidarity while fully
respecting the principle of subsidiarity by safeguarding provincial
jurisdiction.
Nor have past Quebec governments been unwilling to praise the benefits of the
federal system in building our social programs. At the 1946 Dominion-provincial
conference, the Duplessis government stated that: "The federal system
likely offers advantages in the area of social legislation that do not exist in
countries with only one government. Indeed, the co-existence of several
governments which are all autonomous in their own respective fields, because it
creates points of comparison, is likely to create beneficial emulation, for the
greater good of citizens." [translation] In 1970, Robert Bourassa said that
while Quebec claimed "a primary responsibility" in social policy, it
also recognized "the key role of the federal government in ensuring an
acceptable standard of living for all Canadians. Administration of social policy
programs would be mixed, however, depending on whether the type of program
defined by each province is more suited to centralized administration, or, on
the contrary, calls for decentralized management." [translation] Mr.
Bourassa maintained this belief in a constructive cooperation on social policy
between the federal and provincial levels all his life -- a life which ended far
too soon, only a few weeks ago.
Now whatever one thinks of Premiers Duplessis and Bourassa, everybody will
admit that they were vigilant in preserving the traditional constitutional
rights of Quebec. Yet these two statements capture precisely the spirit of
dynamic federalism in reconciling solidarity with subsidiarity that I have been
discussing. I hope that Premier Bouchard has the courage and vision to act in
the tradition of Duplessis, Godbout, Sauvé, Lesage, and Bourassa -- a tradition
of preserving subsidiarity and provincial autonomy while acting in solidarity
with other Canadians to build a stronger social union.
It seems to me that, whenever the Government of Quebec has made tangible,
constructive proposals that make sense in terms of public service quality within
the specific context of Quebec, the federation has been able to make the
necessary arrangements. With good will on all sides, we will succeed again
during the negotiations currently underway.
Canada's Federalism as an Advantage in Creating Our Social Union
Canada has created a strong social union, with national measures to ensure
comparable services for all citizens, but a strong respect for provincial
autonomy and flexibility in administration. The nature of our federal system
means that many of these programs have come together in a way that can seem to
be ad hoc or piecemeal over a number of years. There have been few examples of
one government imposing a radical new innovation in social policy all at once.
Rather, things start small in one or two provinces and then spread across the
country, often with a greater or lesser degree of federal encouragement or
cooperation. But this pragmatic, step-by-step approach to building our social
union seems to have served us well.
Compared with unitary states such as the United Kingdom or France, Canada has
a social union which is efficient and flexible. But compared with some other
federations, notably the United States, which has perhaps too many legal and
legislative checks on national social policy measures, we have been able to
achieve a strong sense of solidarity through our national social programs and
collective action. There are few people here, I believe, who would trade
Canada's health care system for the centralized National Health Service of Great
Britain or the non-existent universal medical protection of the United States.
Canada's position is comparable to only a few other nations, such as Germany,
which shares with Canada the distinction of being a federation with strong,
autonomous units -- the Länder -- but which has nonetheless succeeded in
building a generous social safety net and a strong sense of national solidarity.
Like Canada, Germany has legal and constitutional provisions to ensure local
administration and flexibility in the delivery of programs and revenue
equalization programs to ensure that poorer regions can offer the same standard
of social services as richer regions. If anything, Canada is more decentralized
than Germany when it comes to national standards and program design for social
policy. But what the parallels between Canada and Germany illustrate is that the
federal system is an asset in building our social union. I doubt that either a
centralized, unitary state or a series of ten isolated and egotistical republics
would have been able to create the kinds of social programs that we enjoy as
Canadians.
The Canadian style of federalism will always seem inefficient and cumbersome
to centralists who wish the federal government could create national social
policies by decree, or will seem aggressive and domineering to radical
decentralists who believe that everything should be left to the provinces alone
or the private sector. But the Canadian search for the balance between
solidarity and subsidiarity is in fact an enviable record, and has given us a
system that we can be proud to compare with any other in the world.
The Situation Today: Reforming the Social Union
Our successes in the past are no guarantee that Canadians will continue to
enjoy the same quality of social services in the future. Federal and provincial
governments face new challenges -- the fiscal challenge of controlling debt, the
demographic challenge of an aging population and a growing Aboriginal
population, the challenges of competing in a global economy -- which will all
affect the future of our social union.
The biggest challenge that this government faced when it came to power was
the spiralling federal debt and deficit. The three Martin budgets have moved us
a long way towards fiscal order, and guarantee that the federal government will
continue to be able to act as the supporter and guardian of Canada's social
union. The social programs Canada enjoys, many of which were created by the work
of Paul Martin, Sr., will be preserved for future generations by the work of
Paul Martin, Jr. The cuts that were made were difficult, but they were done
without endangering the most vulnerable in our society, and with the federal
government leading by example in cutting its own programs more deeply than its
transfers to the provinces.
But there has been more to the record of the first three years than deficit
reduction. Since coming to power, the Liberal government has made some important
steps to the restructuring of Canada's social programs for the next century. The
existing system of Established Programs Financing was reformed into the Canada
Health and Social Transfer, which increases the flexibility of the provinces in
program delivery and guarantees a permanent cash floor for federal transfers in
support of health, post-secondary education, and social assistance. However, the
federal commitment to mobility rights for all Canadians and to the five
principles of the Canada Health Act remains undiminished. The Employment
Insurance reforms initiated by Minister Axworthy reorganized the complex array
of federal employment development programs into a few basic measures and reduced
overlap in services with the provinces. It is these reforms that paved the way
for the current federal-provincial negotiations on labour-market measures.
Over the past year, the Government has taken further steps to modernize the
social union. The Prime Minister committed the Government to withdrawing from
labour-market training and to negotiating increased provincial control over
labour-market development with those provinces that wish to exercise these
powers. Minister Young released the details of the federal negotiating position
on labour force in May to widespread praise from provinces, business, and labour,
and negotiations are now ongoing with several provinces, including Quebec. This
is a field of government action in which all provinces have a legitimate
interest because of its close relationship with the provincial field of
education. The proposals tabled by Minister Young, and currently under
negotiation by Minister Pettigrew, will respond to the needs of all provinces in
a supple and flexible fashion, including the particular needs of Quebec.
More broadly, the Government committed itself in the Throne Speech to
discussing with the provinces the values, principles, and objectives underlying
our social union. Since then, the provinces have released the Ministerial
Council report as a basis for future discussions, and at the First Ministers'
Meeting, the federal and provincial governments, excluding Quebec, agreed to
further talks on modernizing our social union. Federal ministers Pettigrew and
Dingwall are now actively engaged in consultation with their provincial
colleagues, and the first meeting of federal and provincial ministers on the
future of the social union will be held next week.
The Social Union of Tomorrow
What will social policy look like as Canada enters the 21st century? How will
the provinces and the federal government come together to reconcile solidarity
and subsidiarity in light of the new challenges Canada faces?
Without wanting to anticipate the results of the work of Ministers Pettigrew
and Dingwall and their provincial colleagues, it is fair to say that there is an
emerging consensus on some of the priorities and directions for the future of
the Canadian social union.
There is widespread agreement that the federal and provincial governments
must cooperate to preserve the social safety net that Canada has built during
the post-war years, especially our Medicare system, which is a source of pride
to the vast majority of Canadians. But the future of the Canadian social union
will not be just preserving the fundamentals of our existing system, but will
also require a creative response to new problems and new priorities.
One of the greatest challenges facing Canada today is the problem of child
poverty. Canada introduced Old Age Pensions, the Guaranteed Income Supplement,
and the Canada and Quebec Pension Plans to address the terrible poverty that
many of our seniors had faced. Over time, the rate of poverty among seniors in
Canada has dropped dramatically. We can be proud of this, and we will continue
to help seniors and to reduce the level of poverty among those citizens who have
done so much to build this country.
Tragically, however, while we have been making progress against poverty among
seniors, poverty among children has been increasing in recent decades. Younger
workers have faced higher unemployment rates and lower real wages in the 1980s
and 1990s, making conditions more difficult for their children. We have seen
higher levels of family breakdown and a rise in the number of single-parent
families. Aboriginal communities, still among the poorest in Canada, have a much
younger average age than the rest of the Canadian population. All of these
trends have contributed to an unacceptable rate of child poverty in Canada, and
increasingly we hear calls for concerted action at both the federal and
provincial level to address child poverty. For this reason, it is an important
priority of both provincial and federal governments in the upcoming discussions
on improving our social union.
There is already a foundation to address child poverty, in the federal Child
Tax Benefit system. This tax measure redistributes $5 billion annually to assist
families with children. There has been considerable discussion of the idea
championed by Premier Romanow of Saskatchewan, among others, of building on this
foundation to improve the Child Tax Benefit system through greater
federal-provincial cooperation and combination of resources to help poorer
families with children.
Whether a joint federal-provincial response to child poverty takes the form
of an integrated Child Tax Benefit or some other combination of measures, this
idea points towards another trend in the evolution of the Canadian social union:
the two levels of government working cooperatively, but focussing on those tasks
that each level of government is best equipped to perform. In many ways, the
provinces are best positioned to provide most frontline services and have
extensive infrastructures to provide health, educational, and social services
directly to citizens. Therefore, it may make sense to enter into arrangements
for the provincial governments to provide some of the other frontline services
previously administered by Ottawa, for example in the area of job training. On
the other hand, through Revenue Canada and Human Resources Development, the
federal government has the system and infrastructure required to provide income
support directly to people, and it is relatively easy for the federal government
to administer certain forms of provincial income support programs to reduce
administrative costs.
I expect that in dealing with child poverty and the other challenges facing
the federation, we will see more of this common-sense specialization in areas of
expertise, based on the principle of providing the best possible service to the
public.
Conclusion: The Social Union and a United Canada
I have talked today about the past, present, and future of our common
Canadian social union, and relatively little about the Constitution or the
recognition of Quebec's distinctiveness, or other topics related to unity. But
that I have discussed social policy rather than change in the Constitution does
not mean that I have been avoiding the importance of national unity. A strong
social union is crucial for the preservation of the Canadian political union.
If we continue in the directions that the federal government and many
provincial governments have proposed, we have every reason to be hopeful for the
strength and vitality of Canada's social union for tomorrow. We will face our
economic and demographic challenges. We will address the scourge of child
poverty. And we will do it together. We will act with a strong sense of Canadian
solidarity, looking out for the common good of all citizens, especially the
least fortunate, while respecting the autonomy of the provinces and communities
in a spirit of subsidiarity.
This is a great collective project. Quebecers must be a full part of it. With
their culture and their sensitivity, they must help one another and other
Canadians, their fellow citizens, to make our social union even stronger. It is
not true that Quebec would be better positioned to address these social
challenges alone. There are many areas where constructive cooperation is
possible without diminishing Quebec's autonomy. On the other hand, an
independent Quebec, burdened by debt, cut off from the spirit of Canadian
solidarity, would face extreme difficulty in preserving its social safety net.
The cuts to social spending that Quebec and other provinces have faced would be
minuscule compared to the social crisis that would be faced in the event of an
attempted secession. If Premier Bouchard really stands for the interests and the
well-being of the people of Quebec, he will join with his provincial
counterparts, and with the noble tradition of many Quebec governments, in
offering constructive solutions for the social challenges we face together as
Canadians.
A great country is not just a country where the social and economic status
quo are comfortable, or where staying together is a better alternative than
breaking apart. A truly great country is a country where all of its citizens can
share common goals and a vision for an even brighter future. And building a
stronger Canadian social union, a union which enhances the solidarity of our
citizens while respecting the subsidiarity of provinces and communities, is one
of the great collective goals we can share as Canadians. So let us work together
for a stronger social union, knowing that in doing so we not only enhance social
justice and help those most in need among us, but make all of Canada a stronger,
better, and more united country.
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