Explaining Social Policy Expansion: The Curious Case of the Justin Trudeau Era in Canada

ABSTRACT Since late 2015, the successive Justin Trudeau Liberal governments have enacted significant social policy expansion, including the adoption of new programs or the expansion of existing social policies in areas such as childcare, dental care, family benefits, old‐age security, and income support for the working poor. This expansion came as a surprise to many political observers and contrasts with the era of “permanent austerity” (Paul Pierson) that has characterized social policies in advanced democracies since the early 1980s. Why did the Liberal Party of Canada (LPC) under Justin Trudeau proceed to such significant social policy expansion? In this paper, we argue that this social policy expansion can be explained by an alignment of electoral interests, institutions, and ideas. Most importantly, we show that the LPC's program drifted towards the left to resemble the NDP's platforms in 2015 and to attract voters that demanded more spending after a decade of conservative governments. We contend that this expansionary dynamic was also facilitated by the presence of vertical fiscal imbalance, which exacerbated public demand for social policy expansion as a response to provincial inaction and helped the federal government to fund its social policy expansion by deficits rather than higher taxes. Finally, from an ideational standpoint, we argue that the policy consensus shifted from neoliberal budget restraint to an emphasis on fighting inequality and stimulating demand.