Sharing the load.

In struggling to deal with its deficit, the federal government has downloaded many programs to the provinces and also cut the amount of funding it supplies for these programs

An interesting public opinion poll in December 1997 found that, by a slim margin, the public trusts the provinces to run social programs more than Ottawa. At the same time, the public everywhere, except in Quebec, wants Ottawa to set national standards. Studying the Angus Reid poll, Darrell Bricker paraphrases what Canadians are saying: "I want somebody to act as the policeman here, but I don't think they should be running the programs." As Mr. Bricker points out: "It's basically an affirmation of the constitutional nature of the country."

The narrow advantage -- 45% to 42% -- includes regional variations. The trust gap in favour of provincial governments is highest on the Prairies, followed by B.C.

In Quebec, the provincial government comes out on top 43% to 34%. Also in Quebec, one in six respondents, the highest rate in the country, say they trust neither level of government.

Nevertheless, outside Quebec, 63% of Canadians think Ottawa should continue to regulate social programs. Within Quebec, 63% say Ottawa should move over and allow the provinces to run the programs as they like.

However, the trend in many areas is to turn more and more powers over to the provinces.

Under the Liberals, transfers to the provinces for social programs have been cut by $7 billion. At the same time, the federal government has abandoned its role in setting minimum standards in many areas (job training, social housing, the environment), except for health care.

In May 1996, the federal government offered to hand the provinces $2 billion a year along with responsibility for employment programs. The move was motivated more by national-unity than economic-efficiency concerns and was intended to meet a long-time Quebec demand for control over labour training.

Under the plan, nearly $2 billion in Employment Insurance premiums collected by Ottawa would be redirected to the provinces for measures such as wage subsidies, income supplements, and job counselling.

(Ottawa will continue to provide employment programs for provinces that don't take the offer.)

Alberta was the first province to strike a deal with the federal government in December 1996. As part of a three-year plan, the province eventually will take charge of the design, management, and delivery of programs involving job counselling, training, work placement, and other labour-market measures. Ottawa will continue to deliver insurance benefits.

Alberta and other provinces have wanted control over job training for several years. They argue that the jurisdiction is provincial and that they are better able to deliver training because they know where their individual economies are heading and what occupations need filling. Alberta also said the two jurisdictions duplicate each other's roles, leading to inefficiencies and waste. The provincial government also believes it is necessary to get more control over training so it can cope with an anticipated skills shortage in the oil-industry.

During the first three years, the agreement can be halted only through joint approval. After that, it can be cancelled on one year's notice should either side feel the program isn't working as planned.

A week after Alberta signed its deal, New Brunswick took over job training and other unemployment services from Ottawa. Quebec, Newfoundland, and Prince Edward Island hammered out their own plans too. The programs all were designed to put employment services under one roof, instead of leaving jobless people to trudge to several locations for programs offered by either level of government.

Immigration is another area the federal government is handing over to the provinces. In 1997, it offered to give the three biggest provinces an extra $60 million a year for immigrant-related programs.

More than half of the new federal money -- about $35 million -- would go to Ontario, with most of the rest (more than $20 million) allocated to British Columbia. Alberta would be third in line with about $5 million. (Quebec has had control of its immigration system since 1991.)

Ottawa also planned to give the provinces more say in the selection of immigrants, a shifting of power that would bring the three provinces closer to the level of immigration authority wielded by Quebec.

(Talks did not involve Saskatchewan, Manitoba, and the Atlantic provinces because most immigrants settle in the four larger provinces.)

While taking charge of employment and immigration may be welcome moves, there are concerns that other social programs could suffer as the federal government releases them. For example, in June 1997, Public Works Minister Diane Marleau warned the Ontario government not to go ahead with plans to download social-housing responsibilities onto municipalities, saying that Ottawa's agreement was needed. Ms. Marleau's challenge to Ontario came in the midst of a major push by Ottawa to hand over its administrative responsibilities for social housing to the provinces. Ottawa had already signed agreements with a number of provinces -- Newfoundland, Saskatchewan, New Brunswick, and the Northwest Territories -- turning federal housing programs over to the provincial level.

But, the Ontario Liberal MPs in Ottawa spoke out against a decentralization deal with the Mike Harris government. Liberal MPs said they didn't trust the provincial Progressive Conservatives to maintain social-housing programs.

The transfer of power from Ottawa to the provinces started in April 1996 when the Canada Assistance Plan (CAP) was replaced with the Canada Health and Social Transfer Fund (CHST). Under CAP, Ottawa split-the cost of specific social services with the provinces. But, in return, the provinces had to meet strict conditions in how the funds were spent. They had to fulfill certain conditions, such as providing social assistance to all people in need, in order to receive federal funds. With the CHST program, provinces receive a huge lump-sum payment from Ottawa to cover post-secondary education, welfare, and health costs. Under the new scheme, the provinces get less money in total and fewer strings attached to how they spend it.

CANADA HEALTH AND SOCIAL TRANSFERS TO PROVINCES
                       $MILLION.
Year         1996       1997         1998       1999
Nfld          410        341          281        263
PEI            87         71           60         57
NS            625        515          429        405
NB            489        402          332        314
Que         5,504      4,583        3,876      3,644
Ont         6,271      4,979        4,072      3,860
Man           730        599          496        469
Sask          624        510          418        396
Alta        1,477      1,173          956        913
BC          2,248      1,813        1,517      1,457
NWT            50         42           36         33
Yukon          23         19           17         16
Total      18,538     15,047       12,488     11,826(*)

Year         2000       2001         2002       2003
Nfld          244        239          239        233
PEI            53         53           53         54
NS            380        377          377        377
NB            295        293          293        294
Que         3,406      3,343        3,304      3,275
Ont         3,635      3,662        3,720      3,799
Man           441        439          440        444
Sask          373        371          373        377
Alta          867        882          904        934
BC          1,389      1,408        1,437      1,473
NWT            30         29           29         29
Yukon          14         14           14         15
Total      11,129     11,111       11,180     11,303

(*) During the 1996 federal election campaign, the Liberals promised the CHST will remain at $12.5 billion for the 1998-99 fiscal year.

Without the conditions imposed by the CAP, antipoverty advocates say the federal government has left poor people at the mercy of provincial governments such as those in Alberta and Ontario.

There are plenty of casualties to bear them out. The Employment Insurance system has taken a major hit. The program is now available to fewer people and it's less generous to those who do get it. Several provinces have been slashing and burning welfare: Ontario, for example, cut its welfare rates by 22% in 1995.

Even a social-policy expert who thinks the problems of offloading programs have been exaggerated says it was a mistake to allow provinces to set welfare rules. By giving them this power they could arbitrarily disqualify certain categories of people, such as able-bodied individuals.

Ken Battle, head of the privately-funded Caledon Institute of Social Policy in Ottawa, spoke to a conference in 1997. He said that while the federal government had made some good changes to the country's social programs, it no longer enforces a safety net through money: "Now the only way to enforce the existence of a safety net will be through interest groups pressuring provincial politicians. And good luck on that one."

Clearly, downloading has its downside.

SUGGESTED ACTIVITIES

1. In 1996, the chairman of a council of ministers seeking more control over social programs said an intergovernmental panel may be one way to ensure that provinces maintain minimum standards in social services. Find out if anything has been done to establish such a panel and how it works.

2. In 1990, author Doris Anderson wrote: "The countries who look after people the best compete the best and have far fewer social problems. Almost all the northern countries of Europe look after people better than we do with more generous maternity leave, child care, family benefits, and less of a gap between the wages of men and women. Canada should be modelling itself after them rather than the socially backward nation to our south." Use Ms. Anderson's comment as the basis for a discussion.

RELATED ARTICLE: FACT FILE

The Canadian Health and Social Transfer from Ottawa to the provinces for 1998 is about $12,500,000,000; in 1994-95 it was $19,300,000,000.