Portico Press

Canada’s welfare regime has long balanced the needs of its citizens with its available resources to maintain services.  As laws are passed to address domestic issues of housing, healthcare, or citizenship, these policies may be influenced by two important political mechanisms.  Retrenchment and policy drift shape the services of the welfare state as time and political preferences change.  Retrenchment is a method in which political actors limit or restrict the social services provided by the state in the aim of reducing overall spending.  This can occur in periods of economic stagnation or contraction, and is often seen as a step towards political austerity, or “tightening the belt”.  Policy drift occurs as legislation is left un-updated, or updated without considering the intricacies of the social issues, resulting in a change in the intended impacts of the legislation.  Both political mechanisms occur naturally in welfare states.  Retrenchment can be prompted by a number of factors, although its effects are uniform: a reduction in social services.  In comparison the passive actions of policy drift have unforeseen consequences to social programs, as it can dramatically alter the usefulness of the services.  

In Canada programmatic retrenchment accounts for the primary methods of cutting expenditures on social programs.  The programmatic shift involves “cutting the size … of social programs” while “generally shifting policies in a residual direction” (Rice & Prince, 2013, 117).  The alteration of policy direction is a key element of retrenchment as direct cutting to funding for social programs is incredibly difficult in the short term.  Instead policy makers begin a slow transition away from strong welfare programs by weakening the underlying policies and limiting the benefits of the services.  In extreme cases significant retrenchment can be achieved as “fiscal crises or federal institutions [can] help to obscure retrenchment effects” (Bashevkin, 2000, 17).  This was the case at the end of the 1990’s as previous fiscal crises had resulted in a large federal deficit for the Chretien government.  In an attempt to reduce spending, and obscured by pressures of mounting national debt, the Chretien government eliminated the Canada Assistance Plan and implemented the Canada Health and Social Transfer.  The shift in transfer programs allowed the government to cut “more than $7 billion … from federal grants to the provinces during the years 1996-1998” (Bashevkin, 2000, 30).  Retrenchment, much like policy drift, occurs slowly as it is politically challenging to swiftly cut services without constituent reprisal.

Policy drift is the direct result of inaction.  It is reasonable to assume that as each year passes the needs and challenges Canadians face will change.  Without consistent and careful amendments to social policy the services available will become decrepit.  The Canadian welfare model has a tendency towards path dependency and as such social policy strives to maintain rather than improve.  In most cases “drift occurs when policy makers choose not to reinforce programs with new resources” which results in the programs becoming obsolete or ineffectual (Banting & Miles, 2013, 20).  This is epitomized by the stagnation of employment insurance benefits from 1998 to 2006 where the maximum rate was 39,000 a year (CRA, 2020).  The policy drift of fiscal benefits is most acute because of inflation as in the aforementioned case inflation outpaced the federal government’s support for EI.  Currently in a heightened period of inflation, policy that has been aimed at supporting struggling Canadians requires review.  This has become a more challenging prospect as the federal government posts larger deficits and nears an election in 2025.  Whether the Trudeau government approaches a direction of retrenchment or not, the policy enacted over the past two decades will continue to drift away from its intended purposes.  

Policy drift and retrenchment reflect the ebb and flow of the welfare state as it grapples with emerging issues and fiscal constraints.  The omission of action results in a policy drift that either cripples social services or renders them obsolete.  This is increasingly evident in the approach to housing being taken by both provincial and federal lawmakers.  In comparison retrenchment responds to fiscal pressures to cut spending and can limit the effectiveness of costly social programs.  While this may allow for a lowered deficit in the next federal budget, the effects of reducing social programs will be felt by all Canadians.  

Citations

Rice, James and Prince, Michael.  Changing Politics of Canadian Social Policy.  2013.  University of Toronto Press. pg# 1-392

Bashevkin, Sylvia. Rethinking Retrenchment: North American Social Policy during the Early Clinton and Chretien Years. 2000.  Canadian Journal of Political Science. pg# 7-36.

Banting, Keith and Myles, John.  Inequality and the Fading of Redistributive Politics. 2013.  UBC Press.  

Canada Revenue Agency. “Government of Canada.” Canada.ca, / Governement Du Canada,-4-Nov.-2020, http://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/payroll-deductions-contributions/employment-insurance-ei/ei-premium-rates-maximums.html.