Abstract

Labour Market Deregulation and Canadian Household Incomes

Jim Stanford

Following the policy prescription laid out by the Organization for Economic Cooperation and Development in its seminal 1994 "Jobs Study," Canadian governments have implemented many painful measures to roll back income security programs in Canada, all in the name of promoting a more "competitive" and "disciplined" labour market. Chief among these measures has been the reduction in the scope of unemployment insurance in Canada. These measures are often credited with reducing unemployment levels in Canada and achieving a more efficient balance between labour supply and demand. In reality, however, the recent improvement in Canadian labour market performance is mostly due to macroeconomic factors. Changes in income security programs have not significantly impacted on labour market behaviour or outcomes, but they have undermined the standard of living of large numbers of marginal or precarious Canadian workers. With both labour markets and government fiscal balances strengthening considerably, now is the time to reconsider the broad deregulatory trend in income security policies that dominated both federal and provincial policy-making in the 1990s.

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