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Published online by Cambridge University Press: 07 November 2014
This paper presents the conclusions of observation, not research, and is therefore expressed as personal opinion. It seems to me that much that has been said about “social security” has been subject to two influences tending to hallucination. First, it is a matter in which young men have seen visions, and old men have dreamed dreams and nightmares. Secondly, the machinery of legislative and administrative procedures, and the very magnitudes of money involved, encourage preoccupation with apparatus. Between rhetoric and jargon there has been too little room for matter-of-fact appreciation of what these arrangements in our national housekeeping really amount to. I thought I might therefore take this opportunity of discussing these arrangements as I see them in plain functional terms.
As to economic consequences, I have no discoveries to offer. There is indeed a very large field of research here, inviting work that will have to proceed by gradual and piecemeal results. Very little is yet known, for example, about the distribution of incomes below the income tax exemption limits, or about the families that depend on them, although such families comprise a large proportion of the population. On such questions as these one can only speculate. But speculation will perhaps be nearer the mark if it starts from a view of our present policies that is reasonably free from emotional or institutional obstructions.
This paper was presented at the annual meeting of the Canadian Political Science Association in London, June 3, 1953.
1 Waines, W. J., “Federal-Provincial Financial Arrangements: An Examination of Objectives,” printed in this issue of the Journal, pp. 304–15.Google Scholar
2 Italics added.
3 The Old Age Security Act of 1951 (effective January, 1952) provides that old age pensions at age 70 are to be financed outside the federal budget through the book-keeping procedure of the Old Age Security Fund, to which the annual cost of pensions is charged and the annual proceeds of the earmarked taxes imposed by the Act are credited on a pay-as-you-go basis. If such expenditure exceeds the earmarked revenue the Minister of Finance is authorized to arrange temporary loans to the fund, and he is required to report its position annually to Parliament recommending measures to increase its revenue if necessary. At the fiscal year-end, March 31, 1953, the fund showed a deficit of $100 million, due in part to transitional factors of the first year of operation, which was accordingly treated as a non-budgetary disbursement financed by temporary loan. For fiscal year 1953–4 the estimated deficit is $67 million, which is due to be treated in the same way pending the Minister's recommendations. Subject to this prospect of amendment, the “2–2–2 formula” denotes the special taxes originally imposed by the Act, shown with the estimated current yields as follows:
4 Douglas, Monteath, Financing Old Age Pensions (Toronto: Canadian Tax Foundation, 10, 1951).Google Scholar