Social Policy in Ontario

Consider a number of the major criticisms leveled in the wake of the Trudeau government’s third budget and a common theme emerges.

In their oft-touted effort to “help the middle class and those who aspire to join it,” the Liberals appear to be constrained by an unwavering commitment, whether grounded in ideology or politics, to targeted programs even where universal alternatives seem to make the most sense.

The budget’s investments in gender equity were most welcome, for instance, for both moral and economic reasons, yet there is truth in the criticism that no policy would have done as much for Canadian women, and for the economy, as a universal daycare plan.

The establishment of an advisory panel to devise a pharmacare program, meanwhile, was the budget’s most ambitious signal, but hopes were deflated somewhat by Finance Minister Bill Morneau’s insistence in the days after that the plan would not be universal, but merely another patch in our threadbare patchwork.

There are understandable reasons to balk at the prospect of creating new universal programs. The start-up costs can be daunting and if Ottawa is to share the burden with the provinces, as it must, then it will have to wade into the forbidding fed-prov morass.

Still, at least in the case of pharmacare, and arguably for daycare, too, the evidence is clear that both the public and the economics support a universal program. So why the opposition?

At a meeting with the Star’s editorial board just before his 2015 electoral victory, Trudeau explained his reluctance regarding universal programs with a parable. When he was a child, his father presented a cake to him and his brothers and divided it into three equal pieces, one for each of them. This division struck Justin as unfair. The oldest, he was bigger than his siblings and so required more energy.

In policy terms, Pierre’s distribution of the cake was regressive, not according to need. And so it is with universal programs, the allegory implied – a national daycare program, for instance, would help those who need no help, an unwise and unjust allocation of resources. (This argument could, of course, be used against medicare, too.)

Trudeau has consistently argued that a means-based approach, in the manner of, say, supplementary drug coverage for low-income people, would be fairer and more fiscally responsible.

It’s a cute story, but not exactly a sound basis for public policy.

Universal programs are not about providing the same service to every citizen. A universal approach to cake would guarantee Justin and everyone else access to the cake they need, when and if they need it. Targeted programs can’t do that. In a universal program, nobody falls through the cracks; no administrator can decide you are not eligible for cake.

Nor are universal programs, as Trudeau implied, necessarily regressive. If the tax system is progressive – that is, if the rich pay a greater share — then so are universal programs. Surely the fairness of the cake’s distribution depends in part on who paid for the cake.

Trudeau’s parable misses what the Swedish political scientist Bo Rothstein calls the “paradox” of universal programs. “One would assume that … policies that tax the rich and give to the poor would be the most efficient way to reduce poverty,” he writes. “But the facts are exactly the opposite.”

The research of Rothstein and others, drawing on numerous international examples, suggests universal programs have a number of advantages that should not be glibly dismissed by governments, especially ones concerned about the middle class and those aspiring to join it.

For instance, because everyone benefits from them and is therefore invested, universal programs have been shown to be more durable, less vulnerable to market fluctuations or political lurches. Commitment to medicare, for example, has not seriously wavered, even through major recessions and long stretches of austerity government.

Moreover, while the initial costs can seem politically prohibitive, universal programs often create significant long-term savings. A universal pharmacare program, for instance, would allow for the bulk-purchasing of drugs and the elimination of administrative bureaucracy, yielding billions of dollars in savings forgone by a more targeted approach.

Finally, and crucially for a government concerned about inequality, universal programs have been shown to promote solidarity and trust. Targeted or means-tested programs may stigmatize recipients, contributing to a sense that low-income people are apart from the rest of the community. “A welfare state built mainly on means-tested programs,” Rothstein writes, can actually “perpetuate feelings of inequality among both the poor and the more affluent.”

Such feelings should worry Trudeau. After all, the prime minister rightly observed that Donald Trump won the U.S. election in part because too many Americans felt they were not sharing in the country’s prosperity and that this was something Ottawa must also address. The evidence suggests universal programs, design depending, can be a powerful tool for doing just that.

Of course universal programs are not always the right option. But Trudeau’s disanalogous story about a kid and his cake obscures the unique benefits of universal programs for those the prime minister purports to want to help most. The middle class and those who aspire to join it would be better served by a real conversation about universality.

https://www.thestar.com/opinion/editorials/2018/03/09/justin-trudeau-should-not-glibly-dismiss-universal-programs.html