Unequal Impact of COVID-19: Emergency Neoliberalism, and Welfare Policy in Canada
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Critical Studies 15 (2020) 22-39
Unequal Impact of COVID-19
Unequal Impact of COVID-19: Emergency Neoliberalism,
and Welfare Policy in Canada
Toba Bryant, Faculty of Health Sciences, Ontario Tech University
Scott Aquanno, Faculty of Social Sciences and Humanities, Ontario Tech University
Dennis Raphael, School of Health Policy and Management, York University
KEY WORDS: COVID-19, NEOLIBERALISM, WELFARE STATES, HEALTH
This paper examines Canada’s liberal welfare state in relation to the COVID-19 pandemic.
It argues that contrary to claims that the pandemic is affecting both rich and poor equally, its
impact is both gendered, racialized and class-related. It thereby exacerbates existing social and
health inequalities. Responsible for much of this is Canada’s welfare state that reproduces
established patterns of power that create systemic social and health inequalities. In addition, the
responses of the Canadian liberal welfare state to the COVID-19 pandemic make explicit its
underdeveloped nature and its difficulties in responding to social and health inequalities. This
paper shows how the political foundation and organizational logic of the liberal welfare state
promotes and reinforces existing inequalities. Similarly, its responses to the pandemic reflect crisis
management that meets immediate urgencies but does little to provide long-term economic and
social security to citizens.
INTRODUCTION
June 9, 2020 represents the beginning of Week 11 of Canadian efforts to prevent the spread
of COVID-19 virus. Although it has become fashionable to declare that the virus ‘does not
discriminate,’ it has exacerbated systemic inequalities, making the already vulnerable even more
so. This has occurred despite historic expansion of governmental support aimed at replacing
incomes from the private market. The differential effects of the pandemic on those of different
classes, races, and genders reflects the undeveloped nature of Canadian welfare state policies. This
paper examines Canada’s liberal welfare state in relation to the COVID-19 pandemic. It places the
pandemic within established patterns of power among various Canadian sectors, and shows how
the political basis and organizational logic of Canada’s economic and political systems work to
promote and reinforce unequal health outcomes.
Welfare States as Forms of Institutionalized Power
The welfare state in wealthy nations was initially developed to provide income and other
supports to the population during periods of unemployment, inability to work, and retirement
(Briggs, 1961). This served to stabilize and legitimate capitalist economics as it both supported
mass consumption and blunted some of the worst effects of capitalist economic competition and
technological change. It did so through measures regulating business activity and providing social
22Critical Studies 15 (2020) 22-39
Unequal Impact of COVID-19
citizenship 1 rights. In this way, national welfare states should be considered emergent state
institutional formations that reflect in part the agency and relative power of progressive social
forces and working-class political organizations (Coates, 2005; Maher & Aquanno, 2018). These
developments in some instances have been motivated by the capitalist class’ goals of self-
preservation in that severely adverse living and working conditions can lead to rebellion. These
formations are nonetheless bounded by the deeper generative forces of capitalist social control,
including historically evolved patterns of class domination. As a result, they respond to changing
objective conditions, organizations of class power and competitive economic conditions, but move
forward through path dependent institutional compromises that, while always themselves crisis
prone, help regulate choices by mediating political possibility. For example, Canadian
governments have long resisted implementing a national childcare program, preferring to consider
the raising of children as a family matter, usually foisted upon women. They do so although the
objective reality of most families is that the stay-at-home mother caring for children era is long
past (Friendly, 2016).
These compromises have taken different forms such that structural, institutional and
agential configurations have produced at least three different forms of the welfare state in wealthy
nations: Social Democratic, Liberal, and Conservative (Esping-Andersen, 1990). These welfare
state types differ in how they manage stratification 2 and decommodification 3, and offer different
roles to the state, market, and family in providing economic and social security. The Social
Democratic form provides a strong state role in providing economic and social security to its
members while the Liberal welfare state leaves these issues to the vagaries of the capitalist market
economy. The Conservative form occupies the middle ground.
Social democratic welfare states (e.g., Denmark, Finland, Norway, and Sweden) provide
comprehensive cradle-to-grave support to citizens through state provision of universal benefits and
greater emphasis on state provision of goods and services, and reducing commodification of
services such as childcare, pensions, and employment training. They derive resources to support
their welfare programs from their more progressive tax systems. Their marginal tax rates come on-
stream much sooner than in most welfare regimes. In addition, their generally stronger labour
sector and high collective agreement coverage among workers minimizes job stratification such
that income inequality rates are the lowest among the welfare state types (Bryant, 2020). All of
these processes evolved under governance by Social Democratic parties of the left. Spurred by
the ideological inspiration of equality, the result is considerably less stratification, greater
decommodification of supports and services, and a stronger state role in the provision of economic
and social security, than seen elsewhere (Bryant, 2020). Some social democratic regimes have
reduced social and health spending in response to neoliberalism and globalization pressures, but
1
Social citizenship consists of social, political and civil rights (Patrick, 2016). The emphasis is on social security
together with participation rights, including access to resources that help individuals feel able to participate in the
community and society in which they reside.
2
Stratification refers to institutionalized differences amongst society members and is usually defined in terms of
wealth, income, education and power and influence (Scott, 2014). Stratification is both a cause and result of the ability
of specific classes and other groups to shape public policy to meet their needs.
3
Decommodification refers to a situation in which citizens are less dependent on their incomes to obtain particular
goods which are provided by the State, such as public health care, pensions, and childcare amongst others (Esping-
Andersen, 1990).
23Critical Studies 15 (2020) 22-39
Unequal Impact of COVID-19
these reductions have tended to be not as deep as those seen in liberal regimes such as Canada and
USA.
Conservative welfare states (e.g. Belgium, France, Germany and Netherlands) provide
generous benefits, but usually provide these through social insurance plans associated with
employment rank, with primary emphasis on male wage earners (Esping-Andersen, 2015). 4
Christian Democratic parties have dominated their political and social history in which traditional
Catholic Church concerns with supporting citizens blended with traditional approaches towards
maintaining status differences and adherence to authority. These tendencies are sometimes
reflected in corporatist approaches (e.g. Germany) where business interests are an important
influence, or in statist approaches (e.g. France) in which the state has a primary role in providing
economic and social security to the population. Though union strength is lower than in social
democratic regimes, collective agreement coverage is very high, reflecting the Conservative
ideological inspiration of solidarity (Saint-Arnaud, 2003; Gautié, 2010).
Liberal welfare states (e.g. Canadian, US, Ireland, Australia, and UK) are underdeveloped,
providing modest, targeted benefits when the economic market fails to meet citizens’ most basic
needs (Saint-Arnaud, 2003; Bryant, 2020). Their political and social history is one of dominance
by pro-business Liberal political parties (the term here refers to an ideological orientation, not an
actual party name) that favour programs that increase the vulnerability of social locations with less
power and influence (Raphael, 2015). Consequently, these systems tend to have a smaller state
role, relying on market mechanisms to deliver goods and services, income and other support
programs. These programs target those who are considered most destitute and most deserving of
support, and aim to meet only immediate needs. There is no commitment to reducing long-term
insecurity or inequality. At the same time, labour in these countries is weak, and the scarcity of
collective employment agreements leads to a greater proportion of the workforce being low paid
than seen in other welfare states. Not surprisingly, work is also more likely to be precarious,
income and wealth inequalities are greater, and poverty rates higher than seen in social democratic
and conservative welfare states (Bryant, 2020).
In addition, all liberal welfare states, with the exception of United Kingdom, are federal
states. As a political institution that divides authority between two or more levels of government,
federalism introduces barriers that make some policy choices easier to achieve than others
(Banting, 2002). Institutions of federalism foster distrust of government and increase the number
of veto points that can delay, undermine, or defeat action. Indeed such diffusion of policy-making
authority seems to be inversely related to social spending as a proportion of GDP, a key indicator
of welfare state development (Banting, 2002). This feature alone does not explain low social
expenditures. In particular, it does not consider how class and political struggle interact with the
dynamics of the economic and political system. Yet by shaping how political power is configured
and making it more difficult to organize multi-racial class coalitions, federalism allows
corporations to consolidate power, and results in social and economic advantage for some and
disadvantage for many others (Raphael, 2015).
4
Some researchers have added a fourth form of the welfare state, the Latin (e.g. Greece, Italy, Spain and Portugal)
(Bambra, Reibling, & McNamara, 2019). These are under-developed family-oriented versions of the Conservative
welfare state that generally provide more supports to citizens than Liberal welfare states. These nations have
experienced financial crises related to the imposition of austerity policies and tax avoidance that threaten their welfare
state.
24Critical Studies 15 (2020) 22-39
Unequal Impact of COVID-19
Given these institutional divisions, and the different forms of market control they engender,
it is easy to miss that with the neoliberal phase of capitalism all “national and regional states have
become more active – not less – in orienting their administrative capacities and policies toward…
facilitating the internationalization of capital” (Albo, 2018: 10). In social democratic and
conservative countries, these practices have significantly eroded social solidarity, limiting the
reach and effectiveness of important welfare programs and institutions (Lodemel & Moreira 2014;
Mau, 2015). Institutional restructuring has arguably been even more pronounced in liberal regimes.
Though aggregate public social spending has increased substantially as a percentage of GDP across
most liberal countries during the neoliberal period, especially after the financial crisis of 2008, this
growth has remained slower than in social democratic and conservative countries, and in fact hides
important changes in program design (Evans, 2018).
Liberal regimes stand out for having introduced punitive work activation strategies,
whereby recipients must accept mandatory work or job search conditions to receive out of work
benefits. Such conditions have disproportionally affected vulnerable workers. In addition, they
have implemented “a growing mixed economy of welfare finance and provision,” based around
the development of “internal markets into the delivery of welfare services,” expanded focus on
public-private partnership, as well as policies “privatizing the cost” of welfare benefits (Deeming,
2017: 414). All of these factors have further increased economic and social insecurity, “reinforcing
existing forms of social inequality in the English-speaking nations, compared to Nordic and
continental European welfare states” (Deeming, 2017: 414; Toth 2014). In Canada, these
interactions have widened economic and social vulnerability for women, racialized populations,
those with less education and persons unable to work due to having a disability (Banting &
Kymlicka, 2006; O’Connor et al., 1999; Bentley, 2018).
Subsequently, the gendering and racialization of working conditions have been especially
tied to neoliberal restructuring in Canada, making the race and gender social locations of workers
increasingly fundamental to stratification and exploitation (Galabuzi, 2018). Market forces, the
State, family, and economic sectors intersect and interact with gender and race and other vulnerable
social locations (Findlay, 2018). The State regulates the labour market and hence working
conditions that lead to exploitation and occupational segregation of women and racialized
populations in precarious and low-paid work as seen in the long-term care and meat processing
sectors (Findlay, 2018). These activities support capital accumulation and related processes that
structure the types of employment and living conditions experienced by women and other
economically marginalized populations. Neoliberalism devalues the labour performed by these
groups.
Welfare in Crisis
It is against this system of institutionalized power and economic organization that we must
understand the uneven effects of the COIVD-19 pandemic. Vulnerable populations are more likely
to be impacted by the virus due to the way they are underserved and excluded from welfare
provision (Toronto Public Health, 2020; Schwan, 2020; Rocha, 2020). At the same time, these
communities are most likely to have precarious, low paid employment without benefits. They have
thus been more willing to take on more work during the public health crisis.
Moreover, social distancing measures (that are even more difficult to implement due to
housing and other constraints), and other health policies have closed these workers off to important
community services and connections, and led to disproportionately high rates of job loss and hours
worked. According to one study, workers earning less than $15 an hour experienced a 52% drop
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Unequal Impact of COVID-19
in weekly hours worked during the first three months of the health emergency, compared to a 6.3%
drop for those earning more than $40 (Winsa, 2020).
It is clear that most socially and economically marginalized communities experience this
public health crisis as a syndemic – “a co-occurring, synergistic pandemic that interacts with and
exacerbates their existing NCDs and social conditions” (Bambra et al., 2020:2). The COVID-19
pandemic is a syndemic in which a public health crisis occurs against conditions of social and
economic inequalities in non-communicable diseases (NCDs), and inequalities in access to social
determinants of health (Bambra, 2020). A syndemic occurs when risk factors or comorbidities
interconnect, interact and increase. These interactions reinforce the disease burden and amplify its
negative impacts. Research to date shows that visible minority populations, those living in material
deprivation, poverty and others who are socially and economically marginalized such as homeless
population, prisoners among others, have an increased likelihood of a number of comorbidities.
These comorbidities coupled with poor social conditions intensify the severity and mortality of
COVID-19 (Rocha, 2020).
These interactions of risk and exposure have been especially acute in the case of meat plant
workers, many of whom are immigrants, refugees, and temporary foreign workers. Though their
working conditions make it “impossible to practice social distancing”, they have been encouraged
to show up for work and are not provided personal protective equipment (PPE) (Keung, 2020;
Dryden, 2020; Frangou, 2020). Other workers facing heightened health risk associated with their
day-to-day contacts with others, and fitting this same racial profile are grocery store stockers and
cashiers, cleaners, custodians, and care workers. Ironically, while their work is now considered
essential, it has long been undervalued and thus precarious and low-paid.
The situation of long-term care homes also makes explicit the fault lines in Canada’s liberal
welfare system. Approximately four-fifths of Canadian cases and deaths from COVID-19 have
occurred in long-term care facilities across Canada (Brean, 2020; Comas-Herrera, 2020). Indeed,
Canada has had the highest mortality rate from COVID-19 in its long-term care sector among
OECD member-countries. The spread and effects of COVID-19 in long-term care facilities,
especially in Ontario and Quebec where conditions have been particularly egregious, have exposed
an appalling lack of concern with the well-being of those who live in the long-term care sector. It
has also highlighted the exploitative working arrangements sustaining these businesses and their
ability to generate high profit rates (Pederson, Mancini & Commons, 2020). At the governance
level, what has been particularly striking is the lack of oversight regarding safety, cleanliness, and
provision of adequate care to residents by the provincial governments (Pedersen & Mancini, 2020).
As one example, shortly after its election in Ontario in June 2018, the Conservative
government discontinued routine inspections of nursing homes, launching investigations only
when so-called “critical incidences” occurred. According to one report, only nine of 626 homes in
Ontario received resident quality inspections in 2019 (Pedersen, Mancini & Commons, 2020).
That the state is now effectively taking these organizations under public ownership, socializing the
costs of addressing these problems while leaving past profits untouched, shows that it can be done.
But state intervention is driven by public health and other crises. These programs are consistent
with the crisis management of neoliberalism that seem unique to liberal welfare state regimes.
Governmental Responses: Emergency Neoliberalism and Reinforcing Liberal Policy
In stark contrast to the usual Canadian public policy approach to providing economic and social
security to Canadians, the federal and provincial governments have recently implemented a rash
of generous support programs and expedited the usual onerous reporting and form filling required
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to access funds. Even aspects of the workplace are being shifted with the federal government
announcing plans to introduce ten days of paid sick leave for all workers across the country. The
most important of these new initiatives are:
• Employment Insurance (EI) Sickness Benefits: The government expanded the Employment
Insurance sickness benefits by waiving temporarily the one-week waiting period and the
need for a medical certificate (Government of Canada, 2020). These changes will enable
individuals who contract COVID-19 or are in ordered self-isolation, or caring for someone
in self-isolation, to be eligible for these benefits. Eligibility also requires that recipients
have worked 600 hours during the previous year in order to receive this benefit.
• Canada Emergency Response Benefit (CERB) provides $2,000 for four weeks or $500
weekly payments to employed and self-employed residents directly affected by COVID-
19 (Government of Canada, 2020). This benefit targets those who are not working for
reasons related to the pandemic, or who are eligible to receive EI regular or sick benefits,
or have exhausted their EI regular benefits or EI fishing benefits between December 29,
2019 and October 3, 2020. The federal government recently extended the CERB from 16
weeks to 24 weeks.
• Canada Emergency Care Benefit: This is a taxable benefit of $2,000 to be paid out every
four weeks for a period of up to 16 weeks to eligible workers who lost their income as a
result of COVID-19 (Government of Canada, 2020). The program was created to provide
EI sickness benefits to workers who have been laid off, whose incomes have been
disrupted, and/or employer sick leave is not available to them as a result of the pandemic.
This benefit is also available to workers caring for sick family or children. Recipients
receive a weekly payment of $450 for up to 15 weeks.
• Temporary wage top-up for low-income essential workers: The federal government offered
to provide a maximum of $3 billion in federal support to augment the wages of low-income
essential workers (Government of Canada, 2020). The provincial and territorial
governments have or are in the process of confirming plans to cost-share wage increases
for their essential workers (Government of Canada, 2020). The provinces and territories
will also decide which workers will be eligible for this support and how much they will
receive.
• Canada Child Benefit: The federal government will provide up to an additional $300 per
child through the Canada Child Benefit (Government of Canada, 2020). These additional
funds will only be available in 2019-2020 fiscal year. There is no indication that this
additional sum will continue beyond 2020.
• Canada Emergency Student Benefit (CESB): This monthly benefit will be paid to post-
secondary students. The program will pay out $1,250 or $2,000 per month per eligible
student with dependents or disabilities. This, too, is a time-limited benefit to be paid only
from May through August 2020.
The federal government also committed to a national paid sick leave program at an estimated
cost of $19-billion (Meyer, 2020). Like the other programs developed in response to the pandemic,
the federal government will offer a ten paid sick days related to the pandemic for workers. Only
workers who do not currently have paid sick leave will be eligible for this program. Few Canadian
politicians seem to recognize the value of a permanent paid sick leave program for all workers. As
a result, there is considerable variation among the provinces and territories in the number of sick
days workers have (Andrew-Amofah, 2020). Few Canadian workers have paid sick days unless
they are provided in a collective agreement, or they work in the health and social services, or
27Critical Studies 15 (2020) 22-39
Unequal Impact of COVID-19
education sectors. Paid sick days and paid sick leave can support safe re-opening of the economy,
protect workers, and reduce the likelihood of new outbreaks.
In effect, these policies represent an extension of welfare programming and make explicit
the deficiencies of the Canadian liberal welfare state. At the same time, they help illuminate the
possibilities of a post-pandemic welfare state that meets the needs of all Canadians. Yet, it is
unlikely that any of these programs will provoke meaningful institutional change or spur the
development of new policies designed to extend program coverage to deal with systemic
inequalities. Instead, they should be viewed as part of the crisis dynamics of neoliberalism within
liberal economies.
As we have seen, neoliberal “modes of administration and policy practices are market
expanding” - they aim at supervising economic and social instabilities to deepen market
rationalities (Albo, 2018: 6,10). This form of governance has therefore also required temporary
bursts of state regulation and spending to manage periods of instability and prevent them from
unravelling the system. These aim to provide additional momentary time-limited support to those
impacted by unforeseen economic shocks. Viewing the development of Canada’s welfare regime
through this understanding of emergency neoliberalism sheds light on the current extension of
state responsibility. If these support programs acknowledge the scope of the crisis, they do nothing
to address wider patterns of income, housing and food insecurity or build new programs to alleviate
structural power imbalances within labour markets. This all makes the present extension of social
rights consistent with the general ethos of liberal welfare states to provide only temporary support.
It also sets up a return to pre-crisis patterns once the health crisis abates.
That this has been the initial trajectory of events should come as no surprise given the wider
political dynamics that have in the past been necessary for even marginal extensions in welfare
rights. The period after the Second World War, that saw the creation of the main programs of the
Canadian welfare state – Unemployment Insurance, the Canada Pension Plan, and Medicare – was
shaped above all by the growing political power of industrial unions and other social movement
forces (Hallstrom, 2016; Teeple, 2000).
In addition, the Co-operative Commonwealth Federation, a party of the political left,
seemed to help shift the governing Liberal Party towards social reform. This climate of political
and class struggle was key to fostering a more cooperative brand of federalism, whereby different
levels of government shared program costs, and provided the essential conditions for a highly
redistributive tax system (Hallstrom, 2016). Postwar politics favoured redistribution, making
Canada more equitable (Banting, 2013). Canada’s liberal welfare state, however, has always
provided modest benefits. Banting and Corbett attribute this tendency to Liberal state reluctance
to emphasize social rights over market rights. Hence, the welfare state targets the immediate needs
of those who can demonstrate that they are destitute.
Indeed, in the early years of the Canadian welfare state, some characterized it as a hybrid
social model (Banting, 2013). The Canadian welfare state developed primarily liberal with some
social–democratic features, such as its health care system. Since the mid-1990s, however,
Canadian governments have drifted away from redistributive policies (Banting, 2013; Heisz, 2016;
Bryant, 2020). Canada and other liberal welfare states seem especially susceptible to the
imperatives of economic globalization and neoliberalism, and hence austerity public policies.
The commitment to these forces is consistent with the liberal welfare state emphases on
the market, capital accumulation and economic growth. These conditions portend poor prospects
for transforming the Canadian liberal welfare state towards greater redistribution in a post-
COVID-19 world. Shifting the Canadian welfare states to be more redistributive will require
28Critical Studies 15 (2020) 22-39
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coalition building among social movements, and educating and mobilizing the Canadian public on
the social determinants of health and how a larger state role can ensure a more equitable society
for all Canadians.
CONCLUSION
The pandemic has served to expose the profound weaknesses of the Canadian welfare state.
It has become increasingly clear that the very workers who now ensure the operations of grocery
stores, and provide medications and care for the elderly, among other important work, deserve job
security, a living wage, access to affordable housing, and free public transit. One would hope that
the income programs created to support Canadian households and businesses for the duration of
the pandemic and efforts towards improved care management at long-term care facilities would
become permanent features and serve as the basis for broader restructuring. Yet such outcomes
seem far-reaching and not at all attuned to the trajectory of neoliberal restructuring and the arc of
current state policy especially in liberal welfare states.
This pathway is not set in stone, but any progressive transformation of Canada’s liberal
welfare model will require immense social struggle. Relying on the goodwill of neoliberal
politicians and the type of action from above characteristic of current interventions will no doubt
lead to disappointing results. In this sense the explosive protests against police violence and the
carceral state that are now spreading across North America and Europe provide an encouraging
sign, especially as these are connected to neoliberal austerity and systemic forms of discrimination
and demand a different kind of state. The participants in these demonstrations reject the dominant
narrative of restoring the status quo that they see as perpetuating social and economic inequalities,
misogyny and racism, subsets of capitalism. The likely alternative, if these forms of political
agitation fail to push forward actionable programs of change, is a return to the uneven,
discriminatory, and exploitive practices underpinning the many-sided inequalities revealed by the
crisis.
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