Conclusions

Abstract

Canada is noted for its relatively developed social safety net and the considerably lower incidence of poverty than found in the United States. Payroll taxes fund a substantial share of the social expenditures and unemployment insurance is a central feature of the system. Gradually rising costs and increasing concerns about possible efficiency loss due to distorted incentives have led to a reform process over the last few years. Meanwhile, minimum wages have also tended to be higher than in the U.S., but economists have not provided much endorsement of their impact on poverty reduction and have expressed some concern that they may be reducing employment. Training programs are numerous and complex, but taken together not a major component of social expenditures, in contrast to many European countries. Canada is sometimes described as a country which economizes on such expenditures by drawing on immigrants who bring human capital with them.