The transition towards neoliberal thinking in policymaking has become a tendency characterizing most local governments throughout the world during the past three decades. Canada could not but fall within the mentioned trend and witness a series of reforms that have a robust impact not only on the decision-making mechanism at both provincial and municipal levels of government but also on the lives of ordinary people.
The essence of neoliberalism
Neoliberalism as such centers on the concept of the free market, especially its ability to self-regulation. Initially, it started with the rule of Margaret Thatcher in the United Kingdom and Ronal Reagan in the United States from where it swept over the most developed countries of the world. It is believed that the role of the state is minimalistic prohibiting severe intervention in the functioning of the omniscient market and economy as the whole. The function of the state is seen in guaranteeing the flawless operation of the market forces that can be achieved through designing a flexible system of regulation (Milz, 2010). Free trade, absolute freedom of the market, deregulation are all the foundations of the political regime.
In addition to it, there are no distinct limits between the state, the society, and the market because all of them function under the rules of the market and every individual is seen as a small free market that is fully responsible for their welfare (Keil, 2002). Moreover, the major postulate of neoliberalism is that the limited functions of the state inevitably lead to the positive shifts in the society such as increases in economic growth, employment, prosperity, efficiency, and freedoms. In practice, however, they seem a bit different from the global tendency towards the growth of rates of unemployment, stagnation of economic growth measured in the volume of gross domestic product, and grave environmental crisis (Ryan, 2015). Nevertheless, neoliberalism remains a dominant political power in most developed states.
The shift towards neoliberalism in Canada
In Canada, the shift towards neoliberal thinking in policymaking began some three decades ago, in the mid-1980s. It is seen at both provincial and municipal levels of government, and it is believed that such transition was motivated by the globalization of the world economy as the whole and the improvement of economic relations between Canada and the United States in particular. Since then, the country became reliant upon the market in solving economic and social issues including policies regarding competitiveness, privatization of state assets, social spending, deregulation, and the overall transition towards individual consumption rather than communal (Capurri, 2013). The very beginning of the shift toward neoliberalism at the federal level is believed to be the election of Brian Mulroney in 1984, which started advocating privatization, decentralization, and deregulation. Even though the leaders and political values changed, the general celebration of neoliberal thinking remained popular including such core elements of the theory such as the rule of the market, rearrangement of the state’s functions, etc.
The impact of neoliberalism on the policy of the Canadian Government
What the country witnessed since the establishment of neoliberalism was the cut to social overhead costs including reduction of welfare payments to those in need, cessation of financing public housing, and further privatization touching upon education and healthcare services. What these changes in policies at the federal level meant is that individuals were now given the responsibility for their lives and welfare to themselves. So, everyone who had enough capital has got an opportunity for becoming even more successful while those who lacked finance were turned into even more significant need.
The same can be said about provincial and municipal governments. Both have received more freedom in making vital decisions regarding the welfare of citizens, however, they are obliged to fall within the federal political framework and the postulates of neoliberalism (Keil, 2002). Even though there is the freedom of choosing policies, there are some features specific to all municipal governments throughout Canada. For example, there is the overall tide towards consumerism that means that the urban authorities aim at creating the so-called ‘creative class’ that has enough resources to control its destiny without the intervention of government and the general priority of ownership over people (Capurri, 2013).
As of the impact neoliberalism has on the everyday life of people living in the cities, local governments that have got enough authority to design their policy started exploiting it as the form of regulating urban territories and making them function under the universal pattern of consumerism preached by neoliberal thinking. There is also a term deriving from the mentioned strive for control, urban neoliberalism, which means that the local states act to unify the everyday life within the broader framework imposed by globalization (Keil, 2002). It derives from the broader division inside the neoliberal theory into two drifts – the global and the personal neoliberalism. Speaking of global neoliberalism, it implies the transition towards the unified politics that is reached through at the personal level because the central idea of the theory is the individual responsible for one’s destiny and well-being.
Speaking of Ontario, neoliberalism completely established itself as the prevailing political belief when Mike Harris came to power in 1995 with the only exception of Ernie Eves’ Conservative government that lasted for just one year from 2002 to 2003 (Capurri, 2013). Harris pledged to decrease taxes and lessen the role of the state in the everyday life of society. That is why he got the victory (Clark, 2002). The newly elected leader has settled the political regime similar to those of Reagan and Thatcher installing neoliberalism as describes in any book on political economy. However, there were few features specific only for the province of Ontario. For example, the government-backed the ideology of the free-market but ignored the nonintervention of state into the economy and the lives of citizens. As a result, every group of society from nurses and teachers to urban residents and government workers felt the strong presence of government in their everyday life represented through various restrictive legal acts. The strict legislation was accompanied by the drastic cut in welfare spending and drop in employment and salary rates, control over the activities of civil organizations, underfunding of education and healthcare institutions, an overload of the working week, etc.
There was also a series of changes focused on the reorganization of political authority and influence. For example, before the establishment of neoliberalism in Toronto, Ontario, seven local governments now were joined into one municipal by the regulation of the provincial government. Furthermore, the provincial government decided to hand over its responsibility for the social welfare to the newly established municipal government, however, left the authority to cut the powers of the municipality to itself. What, in general, happened to the municipal government was the overload with responsibilities with limited powers. As of the provincial government, it enjoyed fewer functions and more domination in the field of taxation, legislation, and functioning of the free market (Keil, 2002).
These tendencies in the division of powers between the different levels of Canadian government prove the statement that neoliberalism strives for separating politics from economics putting them at different levels of jurisdiction (Harmes, 2006). If we take a closer look at the breakdown of authorities, it can be found that economic and political matters are divided and indeed rest at separate levels because provincial governments dictate the rules for the functioning of the society and the municipal governments and the latter are involved with the matters of welfare.
The transition towards neoliberalism in Canada had a wide range of both positive and negative outcomes. As of the positive side of this political transformation, it can be more felt by those who have capital such as large corporations that have got an opportunity to shape the pace of the political development at the municipal and even provincial levels. Moreover, the shift towards the free market has a long-term benefit in employment rate and the determination of the fair level of salaries based on knowledge, skills, and experience. However, in the short term, it leads to higher rates of unemployment, the foundation of wealth polarization, and the widening of social and income inequality in Canadian society. Moreover, it is believed that it has become a primary reason for the rise in the level of homelessness, as there were drastic cuts in social spending that left those in need without the government’s support and the inequality in income has significantly affected house affordability (Donnan, 2014). In general, it can lead to the devastation of the social welfare in Canada because ownership rather than the value of human wellbeing is the priority of the government.
Except for the economic side of the life of society in Ontario, which also felt the influence of neoliberalism was the cultural development of people. It suffered not only because citizens fell victim to income inequality but also because the levels of cultural spending of the municipal and provincial governments decreased (Milz, 2010). It can be easily explained by the fact that there were other challenges often seen as more crucial than the culture that the government had to deal with. That is why significant underfinancing of museums, theatres, galleries, and other cultural institutions has become a common thing. Moreover, as every individual and organization were believed to be a small free market and responsible for their success and financial well-being, the government lifted this burden and handed them over to the agents involved in the industry of culture. In addition to it, the involvement of government in the development of culture in Ontario was limited to the creation of the non-governmental organization, Ontario Arts Foundation, that had to attract investments from the private sector as its primary objective. Later, the Ontario Cultural Attraction Fund was established with the same purpose stressing once more on the neoliberal direction for further development (Gattinger & Saint-Pierre, 2010).
Furthermore, the governments have faced a wave of fierce resistance and discontent in the society. For example, the reaction to joining the local government into one municipal has provoked the rise of racism in the newly established institution. The fact that income inequality and the rates of homeless people and those who could not afford the house brought people out to the streets and provoked the rise of unrest and protests. However, as time passed, people got used to the new political regime, so, the crisis filed as history. There are still some problems at the municipal levels that suffer from the deficit in financing. However, the fact of the matter is that if the postulates of neoliberalism are correctly followed, they will lead to the accumulation of capital. It proves once more that the benefits form the transition towards neoliberal thinking will outweigh the drawbacks, and it can be proved by looking at the example of the United Kingdom, United States, France, and other developed states that follow this path in the development.
So, what is significant about the neoliberal governmental policy in the case of the province of Ontario is that there is a strict division between the economic and political issues. Moreover, there is a severe economic and social polarization in the Canadian society provoked by the fact that those who have financial capital can influence the political course of the municipality and even province without thinking about the welfare of those who are not that lucky. In addition to it, the municipal governments are overloaded with functions and responsibilities while the municipal ones are enjoying having less work but more power. As the overall conclusion, it can be said that initially the impact of neoliberalism on the division of authority between the governments and ordinary people is more negative than positive.
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Donnan, M. E. (2014). Life after neoliberalism in Canada: How policy creates homelessness and how citizenship models fail to provide solutions. International Journal of Arts & Sciences, 7(5), 585-596.
Gattinger, M., & Saint-Pierre, D. (2010). The “neoliberal turn” in provincial cultural policy and administration in Québec and Ontario: The emergence of ‘quasi-neoliberal’ approaches. Canadian Journal of Communication, 35(2), 279-302.
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