Structural adjustment in Canada - Social Services (May 2001)

In Canada, CASA is being undertaken by a Steering Committee of non-governmental organizations from a number of sectors, including labour, development and anti-poverty organizations. As Canada does not receive structural adjustment loans from international financial institutions, the Steering Committee in Canada chose to focus on the 1995 budget, in which the federal government pushed through many structural adjustment reforms, reforms recommended to Canada by the IMF in its Article IV consultations. A first national forum was held, December, 1998 from which four research areas were chosen:

Quantitative and participatory research were undertaken over the following twelve months. Eight regional dialogues were held with the economically disadvantaged to discuss the fourth research area. A second national forum was then held in January 2000 to discuss the results of this research. Four sectoral consultations were held to address the other research areas. The research remains to be synthesized and published.

Cutbacks to social services and the impacts on the poor

It is a bitter irony that the most drastic cuts ever to Canadian social programs occurred in 1995, the same year as the World Summit on Social Development. At Copenhagen, Canada joined other nations in a commitment to the goal of “eradicating poverty in the world”. Meanwhile back home in Ottawa, the legislation implementing the Canada Health and Social Transfer (CHST) simultaneously dismantled the Canada Assistance Plan (CAP). The original goals of the CAP included the provision of “adequate assistance to... persons in need and the prevention and removal of the causes of poverty.” (cited in Day and Brodsky 1998:14)

The CAP legislation defined adequacy as an amount sufficient to meet a person’s basic requirements for “food, shelter, clothing, fuel, utilities, household supplies and personal requirements.” (cited in Day and Brodsky 1998:14) Under the CAP, provinces were required to provide assistance to any person in need, to provide an appeal mechanism and were prohibited from forcing people to work for their benefits.

The CHST legislation eliminated the requirement that provincial social assistance be adequate or comply with most of the conditions attached to the use of federal money. The only condition kept by the CHST was that provinces using federal money must grant welfare to residents who come from other parts of the country.

In the wake of the CHST, the provinces of British Columbia, Alberta, Manitoba, Ontario, Quebec, Nova Scotia, P.E.I. and Newfoundland have all cut back their benefit rates or tightened eligibility requirements for assistance or shelter allowances. (Yalnizyan 1998A) Benefits remain consistently below the poverty line with wide variations from province to province. For example, benefit rates for single-parent families ranged from a low of 50% of the poverty line in Alberta to 68% in Newfoundland in 1996. (NCW 1997-98)


  • Decrease in quality of services as no standards are in place and services are being privatized.

  • Homelessness has increased – emergency shelters have become long-term housing.

  • Real increase in poverty levels

  • Reliance on food banks increased dramatically

  • Cost of living, especially rent increased

  • Mental health patients have become homeless through de-institutionalization

  • Exploitation of particularly women and girls in drug treatment research


  • Reduce military spending

  • Implement a national Social Auditor-General’s office and ensure resources available to social development advocacy groups

  • Create the position of National Human Rights Ambassador or Commissioner whose main responsibilities would be to take up the plight t of the socially disenfranchised.

  • Revise Social Union Agreement with the provinces to strengthen collective responsibility for social programs and restore enforceable national standards

  • Raise welfare rates fro at least 25% to restore cuts made in 1995 (Ontario)

  • Government should cooperation through regional inter-governmental groupings and other ways in promoting national and international economic environments which encourage long-term investment in productive, job-creating and locally owned enterprises, especially for the benefit of poor people, rather than unduly favouring large transnational enterprises and speculative forms of short-term capital flows.
    Effective regulation and monitoring of international financial markets, development of standards to prevent excessive international tax competition and avoidance.

  • Ensure a guaranteed annual income

  • Redistribution of work such as a 4 day work week would open up labour market to the poor

  • Institute a poverty tax credit – a credit for the volunteer hours people give to community groups

  • Increase employment through lowering of interest rates

  • Use government surplus for social spending including public sector job creation and not tax cuts

  • Recognize value of work outside of the wage economy in GDP

  • Tax and transfer corporate entertainment allowances into a social development pool

  • Commit to universality in education from primary to post-secondary

  • Create international regulatory infrastructure for pharmaceutical companies to prevent exploitation of vulnerable people for drug treatment research.

  • Implement the Tobin tax for social development

  • Use more socially responsive economic indicators to chart progress.