Title: Is Canada really No. 1? The shaky foundation of Canada's welfare state
Author(s): Henry Milner
Source: Inroads: A Journal of Opinion. .9 (Annual 2000): p65-75.
Document Type: Article
Full Text:
ONE OF JEAN CHRETIEN'S FAVOURITE themes is that Canada is the best country in the
world. In this article Inroads co-editor Henry Milner draws on research from his recently
completed book to question the assessment, based on the United Nations' Development
Program Rating, that Canada is number one in human development. Is Canada's current
performance, he asks, founded on lasting achievements or fleeting advantages?
It comes down to what he calls civic literacy, on which the sustainable welfare state rests in
Scandinavia and elsewhere. Finding Canada comparatively low in civic literacy,`he cautions
aga)nst res4ing on /ur laurels, sug'esting measures to be taken to sustain the kind of generous
society in which Canadians take pride.
CANADIANS HAVE BECOME ACCUSTOMED to hearing good news about their country's
prospects. Indeed, we seem to have the best of both America and Europe: a dynamic economy
-- driven by American consumers who cannot spend their overvalued dollars fast enough on
our products -- and a generous welfare state to protect the less fortunate.
For confirmation, we need look to no less an authority than the United Nations Development
Program, which, for three of the last four years, placed Canada first on its Human
Development Index (HDI). In each case, publication of the UNDP report was heralded by
Jean Chretien as, in effect, a vote of confidence in his government. And Canadians seem to
agree.
But is that confidence justified? Is Canada's current performance founded on lasting
achievements or fleeting advantages? Canada tops the HDI -- primarily, as we shall see,
because of its high score on the "education attainment index" -- but does it deserve the
honour?
Civic Literacy and why it matters
Conventional wisdom has it that there is a necessary trade-off between social equality and
economic growth, that high levels of redistribution lead to a stagnant economy.
As can be seen in Figure 1, no such relationship exists. Some highly redistributive countries
(as measured by Gini coefficient(1)) do better than average in economic growth (as measured
by increase in GDP per capita); others do worse. The location of a country on one axis tells us
nothing about where to find it on the other. Looking at the rich industrial democracies in
recent years, there is thus no reason to assume either a growth retarding or growth enhancing
effect from redistribution. It can also be seen that, with respect to income equality among the
main OECD countries, Canada sits near the centre.
If redistribution is not a predictor of economic success or failure, what is? My concern is with
those countries that have fairly high levels of social equality. Over the last four years, I have
been engaged in a comparative research project looking at indicators of what I term "civic
literacy" in the 15 richest democratic countries. My argument is that, in the long run, civic
literacy is what sustains a society that is both economically efficient and socially just."
To put it simply, a society's level of civic literacy corresponds to the proportion of its citizens
able to competently exercise that citizenship. Because informed individuals can better identify
the effects various policy options have upon their own interests and those of others, high
civic-literacy societies are more likely to attain long-term optimal social and economic
outcomes. Further, because high civic-literacy societies exclude fewer people from informed
participation through lack of civic competence, the costs of low civic literacy are borne
especially by the economically disadvantaged.
The policies of the Scandinavian welfare states in the second half of the 20th century,
popularly known as the "Swedish Model," fostered civic literacy. As Olaf Palme put it,
institutions were organized "so that the demands and needs [of the disadvantaged were] as
self-evident ... as the needs and interests of other more established citizens." Civic literacy
levels the playing field in which, as American economist Mancur Olson described it, "the
costs of redistribution to the poor are lower, but -- unlike their needs -- more conspicuous than
various forms of ... `implicit redistributions' to powerful interests."(2)
This is not the place to describe how -- and why -- I developed my indicators of civic literacy;
more detail is provided when we look at civic literacy in Canada. Suffice it to say that the two
terms in the expression civic literacy are associated with two elements: "civic engagement" -with turnout in local elections as the main indicator; and "political literacy" -- a composite
measure of the use of information sources other than commercial television.
Figure 2 captures the powerful relationship between civic literacy and economic
redistribution: as can be seen, countries with low Gini coefficients rate higher in civic literacy
(the score combines the composite "TV dependency" scale rating with average turnout in
municipal elections).
To conclude this very brief comparative analysis, I suggest that low civic-literacy societies
such as the U.S. can attain rapid economic growth only at the cost of redistributiveness; while
high civic-literacy societies have the potential of optimally combining both(3) by creating the
conditions for what I call the "sustainable welfare state." Where, then, does that leave
Canada?
The Canadian case
Canada, like most industrial democracies, is faced with a choice: should it follow the highinequality expressway of the United States, or Scandinavia's trickier egalitarian path. While
aware of the obstacles globalization places on it, the latter path remains the preferred option
of continental Europeans. In contrast, the English-speaking democracies have found the
American highway increasingly enticing -- Thatcherite conservatives, of course, but also
some erstwhile social democrats, most notably in New Zealand in the 1980s.
In comparison, perhaps because of its location, Canada seems to have succumbed a bit less to
the charms of the American model. A 1992 international survey found Canadians to be
somewhat more like Swedes than Americans in their views about whether governments have
a responsibility to reduce income disparity. Further, among respondents from the 10 industrial
democracies surveyed, Canadians were least likely to agree that income differences are
needed for the country's prosperity.(4) It appears that, despite the recent successes of Mike
Harris-type conservatives, most Canadians are still prepared to pay higher taxes to maintain a
more equal society, one they perceive to provide a better quality of life than that of the
Americans.
Comparative income distribution data reveal that attacks on the Mulroney government for
dismantling the Canadian welfare state were unjustified. Table 1 shows that, almost alone
among OECD countries, Canada's disposable income was as equally distributed in the mid1990s as a decade earlier, with the result that it went from being closer to the U.S. to being
closer to Scandinavia.(5)
Table 1: Income distribution in OECD countries
Country
Australia
Austria
Belgium
Canada
Denmark
Finland
France
Germany
Ireland
Israel
Italy
Luxembourg
Netherlands
New Zealand
Norway
Spain
Sweden
Switzerland
U.K.
U.S.
Year (1980s)
Gini
Year (1990s)
Gini
Latest
Gini
1985
1987
1988
1987
1987
1984
1984
1987
1986
1985
1987
1984
1986
1987
1982
1986
1986
.295
.227
.235
.289
.207
.296
.250
.330
.310
.238
.268
.253
.234
.220
.323
.304
.341
1990
1991
1991
1992
1991
1992
1991
1991
1991
1991
1991
1990
1992
1991
1991
.309
.230
.285
.239
.227
.305
.290
.268
.268
.307
.230
.305
.229
.335
.350
1994
-
.286
-
1995
1996
1995
1995
1994
.346
.322
.242
.346
.369
Source: Luxembourg Income Survey (New Zealand data from Robert
Stephens of Victoria University)
So far so good. But if high civic literacy is a requirement of the sustainable welfare state,
Canadians' desire for a society qualitatively different from that of the U.S. may in the end be
unfulfilled.
A glance at Figure 2 will confirm the precariousness of Canada's position. Canada is an
outlier -- its equality is greater than its level of civic literacy indicates it should be. Note that
Switzerland is even more of an outlier, but an outlier on the "bad" side, i.e. its level of
equality is lower than would be predicted from its level of civic literacy. Canada is an outlier
on the other side, its level of income equality poorly supported by its level of civic literacy.
The literacy side of civic literacy
Since the capacity to comprehend written information is a necessary condition of civic
knowledge, one might assume that Canada's first-place ranking in "educational attainment" by
the UNDP would be a good indicator of Canada's civic literacy. Unfortunately, it is not.
A more direct indicator of literacy is to be found in the results of the International Adult
Literacy Survey (IALS), the OECD test of functional literacy among adults (developed, to its
credit, by Statistics Canada). Thus far, the results of 12 countries have been published (the
results of 10 more will follow in the summer of 2000). The study tests comprehension, among
a large sample of the population aged 16 and over, on three types of written materials:
narrative prose, documents such train schedules, and problems requiring application of basic
arithmetic.
IALS test scores placed individuals in five categories, from most to least literate. Figure 3
shows, for each country, the percentage of subjects in the lowest and second lowest
categories.(6)
Sweden is the clear winner, with only about 27 per cent of subjects in the two lowest
categories. If we concentrate only on the lowest category -- which is the best single indicator
of the proportion of citizens lacking the minimal competence to exercise informed citizenship
-- three distinct groups emerge: Sweden is joined by the Netherlands and Germany; Canada
fits into a middle category along with Belgium, Switzerland and Australia; at the bottom are
the United States, Britain, New Zealand and Ireland.
Before comparing these IALS rankings with those of the UNDP, a bit of explanation is in
order. The UNDP index was created to compare all countries, rich and poor, and was based on
scores in three, equally weighted areas: educational attainment, GDP per capita, and life
expectancy. "Educational attainment" consisted of two scales: literacy, and average number of
years spent in school.
Literacy was considered as simply the ability to read, and the UNDP gave all the rich
democracies a top score. This means that what differentiated the rich countries in educational
attainment was the second factor, average number of years spent in school. And Canadians
do, on average, spend more years in school than people in all other countries (though not
days, given Canada's short school and especially university year). Of the 11 countries listed in
Figure 3, the UNDP ranked Canada first in educational attainment -- followed by the U.S. and
New Zealand. Sweden, Germany and Switzerland finished 9th, 10th and 11th, respectively.(7)
Note that the IALS functional literacy scores and those of the UNDP for educational
attainment are virtually reversed. All this begins to call into question Canada's title as "the
best country in the world." With respect to civic literacy, the quality of the education received
-- the knowledge learned and retained -- is far more important than number of years spent in
school.
The IALS scores are not the only bad news. As Frances Boylston and I showed in Inroads 5
(1996), Canadian students generally fared poorly in international tests of students' knowledge.
Two years later, the international test of proficiency in science and mathematics (TIMSS)
found that, among the comparable 13 countries, Canadian 16-year-olds in high school placed
7th in mathematics and 8th in physics. Even this result is probably misleading since Canada's
comparatively high secondary school dropout rate means that a disproportionately large
number of potential low scorers were not included in the tests. (Canada's high school dropout
rate explains why Canada did worse in the IALS literacy study -- which tests everyone over
16, not just students -- among those under 35, than among those over 35.)
It would be nice to think that Canadians who drop out compensate later via adult education,
but, from the little hard comparative data available, that does not seem to be the case. Table 2
reveals that not only do Canadians participate less in adult education than Swedes, but that the
difference is especially acute among those with the least formal education. No wonder that,
when IALS scores are broken down by educational level, 27 per cent of Canadians without
high school are functionally literate (placing Canada 6th out of 10; there is no similar data for
Germany), compared with 62 per cent for the first-place Swedes, and 17 for the last-place
Americans.(8)
Table 2: Proportion of participants
in adult education (1983)
Educational
background
Canada
Sweden
Fewer than 9 years
of schooling
5
21
Upper secondary school
19
46
University education
45
64
Source: Rubensson, Kjell (1994). "Adult Education
Policy in Sweden, 1967-1991" Policy Studies Review,
43: 367-390.
On most other indicators of civic literacy, Canada is closer to the U.S. than to the countries of
northern Europe. For example, with respect to book titles published annually per capita (my
calculations based on UNESCO data), Canada placed 11th among 14 Western democracies,
ahead only of Australia, Italy and the U.S. And on the key indicator of daily newspaper
circulation per capita (see Figure 4), Canada rates worse than the U.S., above only Ireland and
Italy.
In sum, if Canada lies closer to Scandinavia than the U.S. in the generosity of its welfare state
and in the attitudes of its citizens, the opposite is the case when it comes to the literacy part of
civic literacy.
The civic side of civic literacy
Turning now to the "civic" side of civic literacy, we note that voter turnout in Canada, local as
well as national, is in fact very low. As we can see in Figure 5, of the 15 countries listed, in
parliamentary elections between 1990 and 1996, Canada's average voter turnout ranked above
that for only three countries: Japan, Switzerland(9) and the U.S.
Figure 6 compares average turnout for local elections, which I consider a more reliable
indicator of active political engagement, and therefore of civic literacy, than voting at the
national level.(10) As can be seen in Figure 6, Canada again ranked above only three
countries, this time Australia, the U.K. and the U.S.
What can be done?
Clearly, it would be foolish for Canada to rest on its laurels. Raising civic literacy -- and thus
reinforcing the shaky underpinnings of the sustainable welfare state -- is a matter of urgency.
On the literacy 'side, it means identifying and counteracting societal developments that lead
young people -- males especially -- to drop out of school and face a life of functional
illiteracy. This requires improvements to the system of formal education and better
availability of adult education. Serious consideration should be given to the subtitling (as
opposed to dubbing) of films, videos and television, as practised in Scandinavia.
Closely related is the urgent need to raise the level of newspaper readership. Here, too,
Canada could learn from the policies of the Nordic countries, where newspapers receive
government subsidies.
While critics of continental integration through the FTA and NAFTA have exaggerated the
negative effects of free trade in products and services, they are right in stressing the threat of
cultural integration. For Canada, such integration, on balance, results in a further drain on
civic literacy, and efforts to keep cultural products out of international free trade agreements
must be intensified. Public broadcasting must be strengthened against competition from
American commercial networks and specialized cable channels. (The signs are not
encouraging: a comparative study of public broadcasting between 1995 and 1998 found that
funding for public television in Canada dropped 29 per cent -- the largest decline for all
OECD countries.(11)) Increased funding is of limited value; more important is using that
money to apply lessons learned from the experience of high civic-literacy countries.
On the civic side of civic literacy, comparative research has shown that voter turnout is higher
in countries with proportional electoral systems (PR). As mentioned above, voter turnout is an
expression of civic literacy, and, in Inroads 7 and elsewhere, I argue that PR raises voter
turnout by simplifying the political map and reducing the incentives for politicians to distort
information. Like the U.S., Canada uses the first-past-the-post system, but Canadians have
failed to notice that its sister Westminster democracies have, in part (in the case of New
Zealand, in full) moved to PR.
Tom Kent, in Inroads 7, argued for the elimination of corporate donations to political parties.
Civic literacy would also be enhanced by a reduction of the effects of money in politics. In
this area, too, Canadians compare themselves favourably to the U.S., but among western
countries Canada's electoral finance regulations are among the least restrictive.
PR and campaign finance reform would also allow for a more coherent social democratic
input into policy debate. Freed from the ever-present threat of electoral annihilation and from
fiscal dependence on the trade unions, the New Democratic Party would be better able to
systematically reassess its policies and potential allies.
Finally, any effort at transforming Canadian institutions is bound to come up against the
question of provincial and federal division of powers. While this is not the place to pursue
these matters, my own belief is that greater provincial autonomy would allow provinces to
build on their own particular strengths and adapt institutions to address their weaknesses. For
obvious reasons, this is true for Quebec.
It is a matter of each community finding appropriate ways to build on its strengths and adapt
institutions to its particular circumstances. Economic globalization and the danger of a
widening "digital divide" add an element of urgency to the choice confronting democratic
societies. All face the prospect of mirroring a globalized world economy with its minority of
winners and a majority of losers, losers not so much due to economic deprivation, but rather
to their inability to take informed collective action. Only high civic-literacy societies,
institutionally arranged so that a substantial majority of citizens can count on meaningful
maps to guide them through the complexity of decisions, will be equipped to meet the
challenge. Only high civic-literacy societies can hope to fairly distribute the costs of
globalization so as to draw optimal advantage from its benefits.
Canada would be a better country if Jean Chretien put aside his "best country in the world"
speech and looked squarely at what is required to improve Canadian civic literacy
Notes
(1) The Gini coefficient is a measure of income distribution. The theoretical minimum value
is 0.0, i.e. all income equally distributed; the maximum is 1.0, i.e. all income going to a single
household.
(2) Palme cited in Tim Tilton, The Political Theory of Social Democracy. Oxford: 1994.
Olson quotation from How Bright are the Northern Lights? Some Questions about Sweden.
Lund University Press: 1990.
(3) This potential can be squandered through poor policy choices -- as in Sweden in the
1980s. (See the articles by Eklund and Milner in H. Milner and E. Wadensjo, eds., Gosta
Rehn and The Swedish Model at Home and Abroad, Ashgate, forthcoming.
(4) John H. Pammett and Alan Frizell, eds., Social Inequality in Canada. Ottawa: Carleton
University Press: 1996. Pages 174, 176.
(5) This is confirmed in a recent analysis of levels and cycles of poverty by Olli Kangas and
Joachim Palme ("Does Social Policy Matter? Poverty Cycles in OECD Countries." LIS
Working Papers #187: 1998). The authors find that, Canada's welfare state, unlike the U.K.
and Australia's, has moved further from the American model and closer to the Nordic model
in recent decades.
(6) "Literacy Skills for the Knowledge Society: Further Results from the International Adult
Literacy Survey," OECD, 1997. I include the results for all but Poland. The IALS provides
separate results for German and French Switzerland, which I have combined, weighing the
former at two-thirds and the latter at one-third. Finally, the IALS figures for Belgium are only
for Flanders.
(7) UNDP, Human Development Report. Oxford: 1997. Page 146.
(8) OECD, Literacy Skills for the Knowledge Society, 29.
(9) Data are from the Institute for Democracy and Electoral Assistance. Unlike other
compilations, IDEA uses as its base age-eligible citizens rather than registered voters.
Presidential elections are used for the U.S., and countries with compulsory voting are
excluded. Note that in Switzerland, due to its particular federal structure, turnout is very low
in national elections and quite high in local elections.
(10) The data are not complete. Canada, the U.S., Australia, Germany, Austria and
Switzerland leave it to their regional units to collect municipal data, and, in some cases, these
states or provinces leave it up to municipalities -- though this has become less common in
recent years. The most difficult countries from which to get local data from regional or
national authorities are the U.S. and Switzerland. For the latter, data were acquired from a
mailed survey of Swiss municipalities by Andreas Ladner of the University of Zurich. For the
U.S., I have made use of similar information gathered by Harvey Schuckman, based on 65 of
79 cities with populations over 200,000 population, in a paper presented at the 1998 American
Political Science Association Convention. Among unitary countries, French data is the least
comprehensive, with results only for the 1983 election and only for the 386 municipalities
with populations over 20,000.
(11) The U.S. reduced its funding by 5 per cent, while funding increased slightly in France,
Japan, Germany, and the U.K. This leaves Canadian public television with 16 per cent of
revenues from state funds compared to 32 per cent for Germany, 34 for Italy, 25 for France,
23 for Japan, and 21 for the U.K. (The information comes from a study for the OECD by the
Centre d'Etudes sur les medias at Laval University, reported in Le Devoir, August 10, 1999).
Source Citation (MLA 7th Edition)
Milner, Henry. "Is Canada really No. 1? The shaky foundation of Canada's welfare state."
Inroads: A Journal of Opinion 9 (2000): 65-75. Academic OneFile. Web. 11 Dec. 2012.
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