COVID-19 in Canada and the United States: Comparing the Social Protection Responses

by Daniel Béland (McGill University), Shannon Dinan (Bishop’s University), Philip Rocco (Marquette University), and Alex Waddan (University of Leicester)

COVID-19 did not, at least at first, appear to prefer one side of the 49th parallel. In early March, Canada and the United States had virtually identical daily rates of confirmed deaths from the virus. Nor did the virus seem to discriminate in wreaking economic havoc. In April 2020, unemployment rates in Canada and the US surged dramatically to 13 and 14.7 percent, respectively. Yet the United States’ tepid public-health response has created a stark divide between the two countries. As of late July, the confirmed rate of COVID-19 deaths (1 in 2,814) there is now twice as high as the Canadian rate (1 in 4,185). Such national figures should not hide the existence of sometimes dramatic discrepancies among states/provinces, which have been unevenly affected by COVID-19.

Regarding the social policy responses to the pandemic, there is a sharp contrast between Canada and the United States. As the economic crisis took shape, federal and subnational governments in each country enacted temporary social policy measures to mitigate the dire, unprecedented socio-economic consequences of the global pandemic. While social scientists tend to group Canada and the United States together as examples of the “liberal” welfare state (characterized by weak state provision), a closer look reveals a number of startling differences in how each country used the tools of social policy to ensure health and economic security for their populations during the pandemic.

Put simply, Canada acted both more boldly and more rapidly than the United States. In Canada, the policy response has been more centralized despite provinces having jurisdiction over most social policy issues. The federal government quickly adopted emergency economic responses on March 25 and April 11 and has continued to build on them. These include the easy to access Canada Emergency Response Benefit (CERB), which provides income support to affected workers, and employer subsidies under the Canada Emergency Wage Subsidy (CEWS). Together, the government has spent over $69 billion CAD on these policies by the end of June. The federal government also increased federal transfers and funding for vulnerable populations as well as families and students. The pandemic exerted important pressure on provinces which are responsible for healthcare provision. Contrary to the US, Canadians maintained their healthcare coverage under the country’s universal structure. However, the number of cases and, significantly, deaths was disproportionate in public and private long-term care facilities. The cost of these emergency measures and slowed economic growth have created record deficits in the modern era at the federal and provincial level.

In comparison to Canada, the United States acted more slowly and less boldly to respond to the social protection challenges of COVID-19. There were important and potentially expensive measures put in place, but the impact of some of these actions was slowed by existing institutional fragmentation. The problem did not initially lie in Washington DC as Congress enacted, and President Trump signed into law, measures that both created new policy instruments and significantly expanded existing ones. A one-off payment of $1200 per adult and $500 per dependent child was made to people who earned less than $75,000 in their 2019 tax filing. The Unemployment Insurance (UI) program was temporarily adjusted to cover categories of workers losing their jobs who would have ineligible for UI under the existing rules and the federal government added an extra $600 a week to the standard benefits. For many recipients this meant that they were receiving more in UI benefits than they had previously been earning. One piece of legislation, the CARES Act, had an estimated cost of $2.3 trillion, amounting to 11% of GDP. In addition, were the Paycheck Protection Program, which was costed at $483 billion, and the Families First Coronavirus Response Act at $192 billion. But if this upstream action was decisive by the standards of modern Washington DC, the downstream implementation was more problematic. The huge numbers of newly unemployed stretched many states’ administrative capacity delaying payments. This was especially so in states such as Florida that had deliberately made the UI application process to be opaque. Further, Republican opposition in Washington prevented the inclusion of extra federal funding directly to the states in the relief legislation. This was especially problematic for states, nearly all of which are required to balance their budgets, at a time when their expenditures on programs such as Medicaid were rising.

There are three basic reasons for the divergence between these two so-called liberal welfare states. First, as shown in the cases of unemployment protection and health care, Canada possessed a social policy architecture that enabled a quicker response to rapidly emerging conditions. Canada’s universal single-payer system, for example, meant that massive unemployment did not translate into historic waves of health insurance losses, as it did in the United States. Second, even when Canada had to adapt its policies in response to the emergency, its parliamentary system enabled a faster response than in the US, where checks and balances slow down policymaking, when different parties control the House and the Senate. The immense power of the executive in Canada isn’t without its problems, however, as the Liberal government undergoes an ethics investigation for benefit administration. Ultimately, this slowed down benefit delivery for student volunteers. Third, the intense polarization of American political parties relative to their Canadian peers has accentuated the gridlock caused by the separation of powers, and has further frustrated the development and maintenance of emergency relief programs in the US.

While long-term trends in both countries are difficult to predict, the social policy divide between the two countries is already great. If anything, that means the gap between the two countries on major indicators of income inequality and health disparities is likely to grow.

One response to “COVID-19 in Canada and the United States: Comparing the Social Protection Responses”

  1. Prof Sandra Hyde says:

    I think you need to be careful about making very broad national comparisons because there are states in the US like Vermont that have per capita infection rates closer to some of the best countries in Asia, and Quebec that has one of the highest death rates per capita in the world due to the absolute ravaging of public funding for long-term care homes. This is the problem about making national comparisons without looking at the local. It’s a constant problem in public health analysis. Sincerely Prof. Sandra Hyde

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