Introduction

The economic crisis that manifested itself in 2008 in the United States (US) also had serious consequences in Canada, a country that has strong economic ties with its powerful southern neighbour. From a social policy standpoint, these countries also have a lot in common in as much as both are considered to be liberal welfare regimes featuring limited public support in at least some policy areas, with an extensive role for private benefits (Esping-Andersen, 1990). One consequence of the gaps in public coverage in policy areas such as unemployment and social assistance benefits is that both the Canadian and the US social welfare safety nets are ill-prepared to alleviate the social suffering stemming from economic hard times. On the other hand, there are important differences between the natures of the social policy systems in the two countries. Furthermore, the impact of the recent economic crisis differed in the two countries in terms of the severity of the recession, the political consequences and the public policy responses.

Two differences between Canada and the US are especially striking. First, the Canadian welfare regime features universal social programmes that simply do not exist in the US, a country characterised by a strict dichotomy between social assistance and social insurance (Fraser and Gordon, 1992). Simply speaking, in Canada, there is a commitment to social citizenship and redistribution that is not as widely present in the US (Myles, 1998; Rice and Prince, 2000). Second, the recent recession did not affect these two countries in the same way. In part because of its better-regulated banking and housing sectors, Canada experienced a significantly milder economic crisis than the US, a situation that has had direct policy consequences. This chapter explores the politics of social policy reform in Canada and the US during the recent economic crisis in order to provide a better understanding of how, if at all, the crisis disrupted prevailing patterns of social policy development in the two countries.

The chapter starts by discussing the impact of the economic crisis on US politics and society before briefly assessing recent policy trends in the fields of unemployment benefits, Food Stamps, healthcare and old-age pensions. Next, looking at Canada we discuss the nature and the political and social impact of the economic crisis.