In the 1930s, losing your job, growing old without savings or needing an operation could push a family into poverty overnight (see Unit 3). By the early 1970s, most Canadians could count on a monthly cheque for each child, a pension in old age, hospital and doctor care paid for by public insurance, and benefits if they lost their job. This social safety net, a set of government programs that protect people from falling into poverty, was built step by step over about 25 years. Why did Canada build it, who pushed for it, and how did it change people's lives?
Why build a welfare state?
- Memory of the Depression: millions remembered relief vouchers and lost farms and did not want to return to them.
- The war effort: Canadians had sacrificed for victory and expected a fairer society afterward. The 1943 Marsh Report laid out a plan for national social security covering unemployment, health care and families.
- Political pressure: the socialist CCF surged in the polls in 1943 and won power in Saskatchewan in 1944 under Tommy Douglas. The Liberals adopted some of its ideas to keep voters from switching.
- Economic thinking: many economists now argued that government spending in hard times keeps people buying and prevents depressions.
- Prosperity: the postwar boom gave governments tax revenue to pay for new programs.
| Program | Date | What it did |
|---|---|---|
| Unemployment Insurance | Created 1940; greatly expanded 1971 | Paid workers who lost their jobs. The 1971 reform covered almost all workers and added sickness and maternity benefits (15 weeks) |
| Family Allowance (the "baby bonus") | Act passed 1944; cheques from July 1945 | A monthly payment for every child under 16, usually paid to the mother, of roughly 5 to 8 dollars per child |
| Old Age Security | In effect January 1952 | A universal pension of 40 dollars a month for everyone 70 and over, with no means test; later lowered to age 65 (phased in from 1966 to 1970) |
| Hospital insurance | Act 1957; in effect from July 1, 1958 | Ottawa paid about half the cost of provincial plans covering hospital stays and diagnostic tests |
| Saskatchewan medicare | July 1, 1962 | The first public plan in North America covering doctors' bills for everyone in a province |
| Canada and Quebec Pension Plans | Passed 1965; began January 1, 1966 | Workers and employers contribute during working years for a pension at retirement; Quebec runs its own parallel plan |
| Canada Assistance Plan | 1966 | Ottawa shared the cost of provincial welfare (social assistance) for people in need |
| Guaranteed Income Supplement | 1967 | Extra monthly money for low-income seniors on top of Old Age Security |
| Medical Care Act (medicare) | Passed 1966; in force July 1, 1968 | Ottawa shared the cost of provincial plans covering doctors' services; every province and territory had joined by 1972 |
Medicare: a fight in Saskatchewan
Saskatchewan led the way. Its CCF government introduced public hospital insurance in 1947, a decade before Ottawa. When Woodrow Lloyd's government (continuing Douglas's plan) launched medical care insurance on July 1, 1962, most of the province's doctors went on strike, arguing that government payment would threaten their independence and the doctor–patient relationship. Supporters, organized in community clinics, argued that no one should go without care because they could not pay. The strike ended after about three weeks with a compromise that let doctors keep some freedom over billing. The federal Royal Commission on Health Services led by Justice Emmett Hall recommended a national plan in 1964, and Lester Pearson's minority government passed the Medical Care Act in 1966, pushed by NDP support in Parliament.
Impact on different groups
| Group | How the programs changed life | What stayed the same or caused debate |
|---|---|---|
| Families and children | Family Allowance put regular money toward food, clothes and shoes; many families could afford more | Payments were modest and did not keep pace with the cost of living |
| Women | The baby bonus was often the first income many mothers controlled themselves; in Quebec, Thérèse Casgrain led a successful campaign to have cheques paid to mothers; UI maternity benefits from 1971 recognized working mothers | Programs largely assumed a male breadwinner; women's unpaid work at home earned no pension of its own |
| Seniors | OAS, the CPP/QPP and the GIS sharply reduced poverty among older Canadians over the following decades | Seniors without work histories, many of them women, received smaller pensions |
| Workers | UI and pensions reduced the fear of job loss and old age | Business groups worried about rising payroll taxes and costs |
| First Nations, Métis and Inuit | Some programs reached communities that had been excluded | Benefits for First Nations families were often administered through Indian agents and sometimes paid in goods rather than cash, and many communities still lacked hospitals and doctors; separate, underfunded "Indian hospitals" operated into the 1970s |
| Provinces, especially Quebec | Cost-sharing paid for new hospitals and services | Health and welfare are provincial responsibilities, so federal programs sparked fights over jurisdiction; Quebec created its own pension plan and invested its funds in Quebec's economy |