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Privatization and gaming : the impact upon the non-profit social service sector Fletcher-Gordon, Lynda 1987

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PRIVATIZATION AND GAMING: THE IMPACT UPON THE NON-PROFIT SOCIAL SERVICE SECTOR By LYNDA FLETCHER-GORDON B.A. (HONS.), Simon Fraser U n i v e r s i t y , 1986 A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SOCIAL WORK IN THE FACULTY OF GRADUATE STUDIES (School of S o c i a l Work) We accept t h i s t h e s i s as conforming to the req u i r e d standard THE UNIVERSITY OF BRITISH COLUMBIA June, 1987 © Lynda Fletcher-Gordon, 1987 In presenting this thesis in partial fulfilment of the requirements for an advanced degree at the University of British Columbia, I agree that the Library shall make it freely available for reference and study. I further agree that permission for extensive copying of this thesis for scholarly purposes may be granted by the head of my department or by his or her representatives. It is understood that copying or publication of this thesis for financial gain shall not be allowed without my written permission. Department of Social Work The University of British Columbia 1956 Main Mall Vancouver, Canada V6T 1Y3 Date June , 1987 DE-6(3/81) ABSTRACT The demise of Keynesianism and the advent of monetarism has had a profound impact on the Canadian 'welfare state'. In B r i t i s h Columbia, as i n other provinces, monetarist p o l i c i e s have i n c l u d e d a ' d o w n - s i z i n g ' of government, and a r e s u r r e c t i o n of a st r a t e g y of p r i v a t i z a t i o n i n the s o c i a l s e r v i c e sector. In some instances, p r i v a t i z a t i o n has meant abandonment; that i s , the government has both shed i t s r e s p o n s i b i l i t y f o r p r o v i d i n g many p u b l i c s e c t o r s o c i a l s e r v i c e s and e i t h e r reduced or elim i n a t e d funds which were d i r e c t e d i n t o the n o n - p r o f i t s e c t o r through the system of ' c o n t r a c t i n g - o u t ' . With the loss of revenue, many n o n - p r o f i t s o c i a l s e r v i c e agencies have been f o r c e d to seek a l t e r n a t i v e sources of f u n d i n g . The c o n t e n t s of newspaper s t o r i e s and o t h e r a r t i c l e s i n d i c a t e d that some had turned to gaming i n order to raise funds. Therefore, r e c e n t developments i n the gaming i n d u s t r y i n B r i t i s h C o l u m b i a were e x p l o r e d i n o r d e r to provide some i n s i g h t i n t o t h e i r relevance f o r , and impact on, the n o n - p r o f i t s o c i a l s e r v i c e sector. In a d d i t i o n , a survey was undertaken i n order to determine the impact of these d e v e l o p m e n t s on a sample of n o n - p r o f i t s o c i a l s e r v i c e agencies in the Greater Vancouver area. The results indicate t h a t c e r t a i n t r e n d s are emerging a c r o s s the n o n - p r o f i t sector. Agencies report e d an increased demand f o r se r v i c e s and, f o r some, the proceeds from e i t h e r bingos or casinos i i have been c r u c i a l i n b o t h m a i n t a i n i n g c u r r e n t l e v e l s of s e r v i c e s and providing other b e n e f i t s . The i m p l i c a t i o n s of this development are explored; for example, in some agencies, f u n d - r a i s i n g has reduced the s t a f f hours spent i n d i r e c t s e r v i c e while otherwise i n c r e a s i n g workloads; some agencies are becoming more 'entrepreneurial* i n order to provide necessary s o c i a l s e r v i c e s ; and, i t may be t h a t c e r t a i n c l i e n t groups are paying f o r t h e i r own s o c i a l s e r v i c e programs. While n o n - p r o f i t s o c i a l s e r v i c e a g e n c i e s are t u r n i n g to gaming i n order to provide programs and s e r v i c e s which the government w i l l no longer support, the government's public statements regarding the future of the gaming in d u s t r y , and i t s a c t i o n s i n t h i s area, have been ambiguous. On the one hand, policy-makers have made public statements to the effect that there w i l l be no extension of l e g a l i z e d gambling beyond t h a t which i s provided by n o n - p r o f i t groups. On the other hand, the government i s moving to i n c r e a s e i t s gaming revenues through d i r e c t means, such as e s t a b l i s h i n g casinos, and i n d i r e c t means, such as i n c r e a s i n g l i c e n c e fees l e v i e d on non-profit organizations wishing to conduct gaming events. I t is contended t h a t n e i t h e r p r i v a t i z a t i o n nor gambling are 'immoral'. However, what i s perhaps problematic i s the r e c e n t marriage of the two phenomena. By reducing d i r e c t s e r v i c e s , as w e l l as c u r t a i l i n g funding to the n o n - p r o f i t s e c t o r , the government has r e s t r a i n e d i t s expenditures. When i i i non-profit organizations turn to of revenue for the government, the v i t a l social services which gaming, they become a source while simultaneously providing the government has abandoned. i v TABLE OF CONTENTS Approval Abstract i i Lis t of Tables v i i Acknowledgements i x Dedication x I Introduction 1 The Structure of the Thesis 4 II Origins and Transformation of the Welfare State 9 Origins of the Welfare State 10 The Development of Social Security Programs on the Continent 17 The Legacy of the Speenhamland Act 19 The Poor Law Reform Act of 1834 20 Canada After Confederation 25 The Emergence of the Canadian Welfare State 27 The Nature and Functions of the Welfare State 32 The Crisis of the Welfare State 3 7 The Post Crisis Period 4 5 The Post-Welfare State 48 I I I Privatization 5 6 Models of Privatization 62 Agencies Involved i n the Provision and Production of Social Services 64 v Privatization i n British Columbia 74 The Search for Funding in the Face of Government Cutbacks 81 III Gambling 84 An Hist o r i c a l Overview 84 The Origins of Modern Lotteries 87 Gambling in Canada 90 Gambling in Briti s h Columbia 95 The Government and Gambling 114 Funding Social Services from the Proceeds of Gambling Act i v i t i e s 115 V Method 121 The Research 121 The Subjects 122 Procedures 124 Procedural D i f f i c u l t i e s and and Other Problems 128 VI Results 130 The Agencies 130 Gaming and the Non-Profit Sector 137 Levels of Funding 143 Levels of Service Delivery 145 Impact of Fund-Raising on Agencies and Staff 14 6 VII Implications 154 Gaming and Non-Profit Sector 157 The Challenge of the 'New R e a l i t y ' 169 v i LIST OF TABLES Community Grants, British Columbia, 1970-85 Summary of Revenues, Expenditures, and Lottery Fund Balances: 1982-85 A Breakdown of Those Questionnaires That Were Returned The Groups Which Received Services and the Number of Programs or Ser v i c e s Provided by Agencies The years i n Which The Agencies W ere E stablis hed Numbers of Full-Time, Part-Time, and Voluntary Personnel Employed by Agencies The Size of Agency Budgets The Sources of Agency Funding The Years in Which Agencies Began Conducting Gaming Events i n Order to Raise Money The Reasons Why Agencies Began Conducting Casinos or Bingo Ac t i v i t i e s How Agency Staff Perceive the E f f e c t of Losing Gaming Revenues The Funding Arrangements of Those Agencies Reporting No Decreases in Funding Since 1983 v i i The Individuals Involved i n Agency Fund-Raising The Effect of Fund-Raising on S t a f f of the Agencies The Ut i l i z a t i o n of Those Revenues Generated through Conducting Gaming Ac t i v i t i e s The Number of Licences Issued to Non-Prof i t Organizations v i i i ACKNOWLEDGEMENTS No work i s e v e r the s o l e a c c o m p l i s h m e n t of any one individual, and there are many people who have contributed to both the formulation and preparation of t h i s t h e s i s . I wish to acknowledge the assistance and guidance given to me by my thesis committee; namely, Professors J. Crane, C. McNiven and J . M acDonald. I owe a s p e c i a l debt of g r a t i t u d e to Professor Robert M. Gordon, School of Criminology, Simon Fra s e r U n i v e r s i t y , f o r providing constant encouragement and being a t i r e l e s s l i s t e n e r and reader of d r a f t s . I also wish to acknowledge the assistance of the agency personnel who p a r t i c i p a t e d i n the study. In many instances, assistance was given despite both the pressure of heavy work l o a d s and the tim e c o n s t r a i n t s w h i c h accompany the preparation of an agency's annual budget. F i n a l l y , I wish to thank some s p e c i a l f r i e n d s who have provided both support and assistance over the past months: namely, E a r l England, P h i l l Esau, Steve Mason, Dawn Embree, Connie Ferschweiler and Colette Hervieux. i x DEDICATION TO: PURPOSE Chapter I INTRODUCTION The problems and transformations which began to a f f e c t the i n t e r n a t i o n a l economic system during the 1970's, and which u l t i m a t e l y manifested themselves as a world-wide recession, have had a profound impact on the Canadian economy at both the f e d e r a l and p r o v i n c i a l l e v e l s . The Province of B r i t i s h Columbia was p a r t i c u l a r l y vulnerable to the e f f e c t s of the r e c e s s i o n due t o i t s heavy dependence on e x p o r t i n g i t s n a t u r a l resources of lumber, copper and c o a l (Magnusson et a l , 1984). When other countries began implementing p o l i c i e s of monetary r e s t r a i n t , l e v e l s of p r o v i n c i a l exports dropped. As the reduced demand f o r n a t u r a l resources drove down prices, revenues from p r o v i n c i a l n a t u r a l resources f e l l from $1,319. m i l l i o n i n 1 979-80 t o $ 544 m i l l i o n i n 1 982-83 (S c h o f i e l d , 1984). In a d d i t i o n , as l e v e l s of unemployment jumped from 6.5 percent in 1980 to 12.1 percent in 1982, personal spending slowed and reduced the amounts of personal and sales tax revenue flowing into government coffers. L i k e the governments of Great B r i t a i n and the United States, both the f e d e r a l and p r o v i n c i a l governments of Canada faced increased demands f o r d i r e c t t r a n s f e r payments. In 1980-81, the B r i t i s h Columbia Min i s t r y of Human Resources (now the Minist r y of S o c i a l S e rvices and Housing) spent $378.9 mi l l i o n (50.2 percent of i t s budget) on income assistance and GAIN 1 payments to the handicapped. By 1982-83, thi s amount had r i s e n to $609.2 m i l l i o n or 55.7 percent of the Ministry's budget. By 1983, p r o v i n c i a l government expenditures were s a i d to be o u t s t r i p p i n g r e v e n u e s to s u c h a degree t h a t B r i t i s h Columbia would soon be on the brink of f i n a n c i a l d i s a s t e r (Magnusson e t a l , 1984 ). Whether, i n f a c t , a • f i s c a l c r i s i s ' had appeared i n the province has been subject to considerable debate (Allen and Rosenbluth, 1986; Magnusson et a l , 1984). I t was against th i s backdrop that, upon t h e i r r e - e l e c t i o n i n 1983, the S o c i a l C r e d i t government introduced the f i r s t r e s t r a i n t budget. Although the need f o r moderate r e s t r a i n t measures was generally recognized, most B r i t i s h Columbians were unprepared f o r the simultaneous assault on labour, the public s e c t o r and s o c i a l welfare programs and s e r v i c e s . The various r e s t r a i n t measures, which were purportedly aimed at combatting the budget d e f i c i t i n the face of the on-going recess i o n , included 'downsizing' the government through, f o r example, p r i v a t i z a t i o n ; wage r e d u c t i o n s ; d e - r e g u l a t i o n ; employment through mega-projects; c o n c e n t r a t i n g power i n V i c t o r i a ; and, reducing expenditures on education (A l l e n and Rosenbluth, 1986). The subsequent implementation of each of these measures has had far-reaching effects on the economy of B r i t i s h Columbia. 2 Although the 1983 budget provided for a 12.3 percent increase in public s e c t o r spending, the increased expenditures would e v e n t u a l l y be ab s o r b e d by i n c r e a s i n g income a s s i s t a n c e payments and projects aimed at s t i m u l a t i n g the c o n s t r u c t i o n industry (Redish et a l , 1986). While more money was to be made a v a i l a b l e f o r c o n s t r u c t i o n p r o j e c t s , other areas of public spending were to be subject to considerable r e s t r a i n t . There was a r e - a l l o c a t i o n of funds away from s o c i a l welfare services and programs and toward mega-projects which were to provide employment. Of p a r t i c u l a r concern f o r many i n d i v i d u a l s , both those who worked w i t h i n the s o c i a l w e l f a r e s e c t o r and those who be n e f i t t e d from i t s programs or ser v i c e s , was the plan to privatize many social welfare programs. The privatization of s o c i a l s e r v i c e s s u c h as r e h a b i l i t a t i o n p r o g r a m s f o r juv e n i l e s , and adult and youth r e s i d e n t i a l care f a c i l i t i e s , was v i e w e d as a d i r e c t a t t a c k on the s o c i a l s e r v i c e s component of the p r o v i n c i a l 'welfare state'. The government strategy for meeting the increased demand for d i r e c t income assistance t r a n s f e r payments also included c u r t a i l i n g or e l i m i n a t i n g many ser v i c e s t h a t were provided by the public sector. At the same time, government revenues that had previously been d i s t r i b u t e d to the n o n - p r o f i t s o c i a l s e r v i c e s e c t o r were a l s o r e d i r e c t e d to d i r e c t t r a n s f e r payments. As a r e s u l t , while many non - p r o f i t o r g a n i z a t i o n s 3 have experienced increased demands f o r s e r v i c e , they have been f o r c e d to seek out a l t e r n a t i v e sources of funding. Although f u n d - r a i s i n g by n o n - p r o f i t o r g a n i z a t i o n s i s not a new development, of s p e c i f i c i n t e r e s t was the f a c t t h a t some n o n - p r o f i t s o c i a l s e r v i c e o r g a n i z a t i o n s a p p e a r e d to be turning to gaming as a way of r a i s i n g funds to o f f s e t cuts i n government funding. The Structure of the Thesis The aim of t h i s thesis i s to present a case study of the p r o c e s s and outcomes of r e s t r a i n t and p r i v a t i z a t i o n , as e x h i b i t e d i n a sample of n o n - p r o f i t s o c i a l s e r v i c e agencies which have turned to gaming as a source of revenue. These agencies have followed t h i s course of a c t i o n i n order to e i t h e r supplement cuts i n government funding or remove (or r e d u c e ) t h e i r dependence upon t h i s s o u r c e of f i n a n c i a l support. In order to show the r e l a t i o n s h i p of t h i s case study to p r i o r p o l i c y developments, the l a t t e r are examined in some d e t a i l . The c u r r e n t s h i f t to what i s more a c c u r a t e l y described as ' r e - p r i v a t i z a t i o n ' would seem to h e r a l d a r e t u r n t o an e a r l i e r 'residual' concept of s o c i a l s e c u r i t y . The thesis begins with an examination and review of the o r i g i n s of the welfare state which suggests that the development of s o c i a l welfare p o l i c i e s i s , indeed, moving f u l l c i r c l e . Insofar as 4 economic policie.s have underpinned the establishment and expansion of the 'welfare s t a t e 1 , the i m p l i c a t i o n s of the abandonment of K e y n e s i a n economic t h e o r y i n f a v o u r of monetarism are reviewed i n d e t a i l . The nature and the r o l e of the 'welfare s t a t e ' are examined through a discussion of, what Drover and Woodsworth (1978) have l a b e l l e d , "welfare paradigms". Having o u t l i n e d the economic and i d e o l o g i c a l context w i t h i n which p r i v a t i z a t i o n was i n t r o d u c e d , the t h e s i s turns to a t h e o r e t i c a l discussion of the phenomenon. I t cannot be a u t o m a t i c a l l y assumed t h a t the p r i v a t i z a t i o n of s o c i a l s e r v i c e s must be a negative development, or one t h a t i s d e t r i m e n t a l t o a n a t i o n ' s c i t i z e n s . F o r example, i f p o l i t i c i a n s and government p o l i c y - m a k e r s are developing s o c i a l p o l i c i e s based on the premise t h a t c i t i z e n s are e n t i t l e d to be p r o t e c t e d from the c y c l e s of the market system, and government has a r o l e to play i n providing t h a t p r o t e c t i o n , i t i s not necessary t h a t the s e r v i c e s be a c t u a l l y produced or provided by government employees. Mechanisms such as 'contracting-out', coupled with the implementation of s t r i n g e n t r e g u l a t i o n t h r o u g h t h e e s t a b l i s h m e n t and enforcement of minimum standards, may r e s u l t i n a system of s o c i a l s e r v i c e d e l i v e r y that i s as equally s a t i s f a c t o r y as a system wherein only the government produces the necessary s e r v i c e s . 5 However, i n B r i t i s h Columbia, as i n other countries, the concept of p r i v a t i z a t i o n has been introduced and i n t e r p r e t e d w i t h i n a n e o - c o n s e r v a t i v e i d e o l o g i c a l f r a m e w o r k . Consequently, privatization measures were not accompanied by a concern f o r advancing c o l l e c t i v e i d e a l s or humanitarian p r i n c i p l e s r e g a r d i n g the i n e q u a l i t i e s t h a t accompany a c a p i t a l i s t economic system. Rather, what has been r e -introduced i s the c l a s s i c a l l i b e r a l perspective that focussed on i n d i v i d u a l i n i t i a t i v e and d r i v e , o p e r a t i n g w i t h i n a competitive market system. One major consequence has been a r e s t o r a t i o n of the old notion t h a t the p r o v i s i o n of s o c i a l w e l f a r e does not f a l l w i t h i n the p u r v i e w of the s t a t e . Chapter three provides a b r i e f overview of the advent and subsequent development of p r i v a t i z a t i o n i n B r i t i s h Columbia and concludes with an examination of i t s impact upon the non-p r o f i t sector. Given the i d e o l o g i c a l framework of p r i v a t i z a t i o n and the use of gaming as a mechanism f o r r a i s i n g funds by private non-p r o f i t s o c i a l s e r v i c e o r g a n i z a t i o n s , i t i s c r i t i c a l to monitor the e f f e c t s of these developments on programs and s e r v i c e s . This thesis provides a s t a r t i n t h i s d i r e c t i o n since i t w i l l explore developments i n the gaming industry which have had a direct impact upon non-profit organizations; the extent to which non-profit agencies have been involved in the industry; and, the consequences of t h i s development. 6 These issues are examined i n depth i n chapters four, f i v e and s i x . Chapter four provides an overview of developments i n the gaming industry which have occurred over the past four years. These developments are s i g n i f i c a n t i n t h a t they have had a c r i t i c a l impact on those n o n - p r o f i t o r g a n i z a t i o n s which are already dependent upon gaming revenues to support a v a r i e t y of s o c i a l , r e c r e a t i o n , c u l t u r a l , sports and s o c i a l s e r v i c e programs. In addition, the government has recently turned to gaming to provide i n c r e a s e d revenues f o r i t s own a c t i v i t i e s . As w e l l as e x t r a c t i n g l i c e n c e f e e s f r o m n o n - p r o f i t o r g a n i z a t i o n s , the government has i n s t a l l e d s l o t machines on f e r r i e s and i s i n v e s t i g a t i n g the f e a s i b i l i t y of e s t a b l i s h i n g w o r l d c l a s s c a s i n o s a t t o u r i s t d e s t i n a t i o n s . The i m p l i c a t i o n s f o r n o n - p r o f i t o r g a n i z a t i o n s of a government encroachment into the gaming industry are discussed. The research procedures and the r e s u l t s of the study are presented i n chapters f i v e and s i x . Although t h i s was a s m a l l p r e l i m i n a r y s t u d y , the r e s u l t s i n d i c a t e t h a t the majority of o r g a n i z a t i o n s that p a r t i c i p a t e d began conducting bingos and casinos a f t e r 1983. The two reasons c i t e d most ofte n to e x p l a i n agency involvement i n gaming were: (i) the agency could not obtain funding from any other source; and ( i i ) the agency was refused government funding f o r a new or i n n o v a t i v e program. 7 At the same time as non-profit organizations are being forced to turn to gaming as a way of r a i s i n g funds, the government appears to be less than supportive of the no n - p r o f i t sector. While l o t t e r y t i c k e t s are sold, and gaming is j u s t i f i e d , on the basis t h a t the revenues are used to support n o n - p r o f i t and community groups, the government is diverting some of the funds away from such groups and i n t o general revenues. The i m p l i c a t i o n s of such a development, f o r the n o n - p r o f i t sector, are examined. The t h e s i s c o n c l u d e s by e x a m i n i n g the n o t i o n t h a t , i n conjunction with changes i n the l a r g e r economic system, the n o n - p r o f i t s o c i a l s e r v i c e s e c t o r may be u n d e r g o i n g a metamorphosis. I t i s argued t h a t n o n - p r o f i t o r g a n i z a t i o n s are being forced to become more 'entrepreneurial' in order to continue to deliver the social services that have become even more necessary as a consequence of both the recession, and the government's subsequent restraint measures. 8 Chapter I I THE ORIGINS AND TRANSFORMATION OF THE WELFARE STATE Many analysts have r e c e n t l y argued that the 'welfare s t a t e ' in most Western capitalist nations has experienced a profound c r i s i s (Gough, 1979; G i l b e r t , 1983; Taylor-Gooby and Dale, 1981). Writers contend that t h i s s i t u a t i o n has arisen as a consequence of two significant developments which have had a marked impact on state policy-making; namely, the emergence of the ' f i s c a l c r i s i s ' of the s t a t e , and the r i s e and rapid growth of a neo-conservative ideology (Taylor-Gooby, 1985; G i l b e r t , 1983). This chapter w i l l review both the o r i g i n s of the welfare state and the economic p o l i c i e s and ideology which underpinned i t s development in Canada. In a d d i t i o n , both the role of s o c i a l welfare i n an i n d u s t r i a l s o c i e t y and the causes and i m p l i c a t i o n s of a welfare sta t e 'in c r i s i s ' , w i l l be examined. This discussion w i l l provide the context f o r an e x a m i n a t i o n of ' p r i v a t i z a t i o n ' ; one of s e v e r a l r e s t r a i n t measures introduced by governments i n order to 'downsize' the public sector. The term 'welfare state' generally r e f e r s to the complex system of p u b l i c l y f u nded and o p e r a t e d s o c i a l w e l f a r e , health, education, and a l l i e d s e r v i c e s and income tr a n s f e r s , as w e l l as to the r e g u l a t i o n of p r i v a t e a c t i v i t i e s through l e g i s l a t i o n (e.g. minimum wage and hours of work). Cu r r e n t l y , the welfare state has an impact upon the l i f e of 9 every Canadian c i t i z e n , through the payment of cash b e n e f i t s or the provision of s e r v i c e s (Djao, 1983). In a d d i t i o n , the welfare state has an i n d i r e c t impact on c i t i z e n s through the imposition of tax deductions or the granting of tax b e n e f i t s (Flora and Heidenheimer, 1981). Citizens expect that, among o t h e r t h i n g s , t h e i r h e a l t h needs w i l l be met t h r o u g h u n i v e r s a l medical schemes; t h e i r c h i l d r e n w i l l be educated i n public schools; they w i l l be p r o t e c t e d from e x p l o i t a t i o n i n the work place; and, t h a t 'old age' income s e c u r i t y programs w i l l provide a modicum of p r o t e c t i o n against poverty when they are too old to work. Origins of the W elf are State The development of the welfare state i s a r e l a t i v e l y r e c e n t phenomenon in the history of nation states. I t s advent has been l i n k e d to i n d u s t r i a l i z a t i o n o c c u r r i n g w i t h i n both a c a p i t a l i s t i c e conomic system and a d e m o c r a t i c p o l i t i c a l framework (Gough, 1979, Armitage, 1975). I t cannot be assumed, however, that these factors together (capitalism and democracy) are necessary prerequisites for the development of a welfare s t a t e . F l o r a and Heidenheimer (1981) point out that, i n i t i a l l y , s o c i a l welfare p o l i c i e s and i n s t i t u t i o n s did not d e v e l o p among the most d e m o c r a t i c and a dvanced c a p i t a l i s t European s o c i e t i e s . F o r example, in 1881, the Emperor of the German Empire provided the impetus f o r the implementation of s o c i a l s e c u r i t y l e g i s l a t i o n . A f t e r 1917, 10 social welfare programs were developed in non-democratic and n o n - c a p i t a l i s t Russia. "Thus, the welfare state seems to be a f a r more g e n e r a l phenomenon of m o d e r n i z a t i o n , not e x c l u s i v e l y t i e d to i t s ' d e m o c r a t i c - c a p i t a l i s t ' v e r s i o n " (Flora and Heidenheimer, 1981; p. 23). Although i t is generally accepted t h a t the Beveridge Report i n B r i t a i n (1942), and the Marsh Report i n Canada (1943), l a i d the foundation for the development of the modern welfare state i n those countries, the i n i t i a l attempts at developing a f o r m a l system of poverty r e l i e f were embodied i n the Poor Laws of E l i z a b e t h a n England. These were passed i n 1531 and were supplemented, at various i n t e r v a l s t h e r e a f t e r , u n t i l 1601 (Pound, 1971). I t i s important to consider both the i n t e n t and the s o c i a l context of these, and other, e a r l y precursors of our curre n t s o c i a l assistance schemes since the modern welfare state bears t h e i r d i s t i n c t i v e hallmarks. In a d d i t i o n , such a review h i g h l i g h t s how curre n t solutions to old problems continue to have t h e i r roots deeply embedded i n h i s t o r y . In E n g l a n d , when the f e u d a l system broke down i n the fourteenth century, and workers were freed from serfdom, the necessity f o r some form of poverty r e l i e f arose. Feudalism, while enslaving the worker, had at the same time, provided a modicum of economic s e c u r i t y during times of unexpected c r i s i s . I t was the landowner's r e s p o n s i b i l i t y , and i n his or 11 her best i n t e r e s t s , to maintain the workers at a l e v e l which allowed them to be productive. As the old system crumbled, men and women began t r a v e l l i n g across the country f o r a v a r i e t y of reasons: to assert t h e i r i n d e p e n d e n c e from t h e i r f o r m e r owners; to o b t a i n t h e i r l i v e l i h o o d by begging; to go to war; and, to migrate to the c i t i e s where they might be employed w i t h i n the v a r i o u s industries. However, by the middle of the fourteenth century, famine and plague had decimated the population and reduced the labour pool, and as a r e s u l t , wage l e v e l s were driven up. As a response to t h i s supply/de mand problem, Parliament enacted the Statute of Laborers i n 1 349 (de S c h w e i n i t z , 1943). The Statute of Labourers was an attempt to redress the problem created by workers who either refused to work or who i n s i s t e d on excessive wages i n the face of a labour shortage. The s o l u t i o n was to "compel the unattached man to work f o r whoever wanted him, by forbidding the labourer to travel, and by stopping alms to the man who, i f he could beg, would presumably refuse to work" (de S c h w e i n i t z , 1943; p. 6). In t h i s regard, history can be seen to be r e p e a t i n g i t s e l f . As r e c e n t l y as six months ago, the B r i t i s h Columbia government announced that i n d i v i d u a l s who refused to work, e s p e c i a l l y single mothers, or who insisted on more than a minimum wage, 12 were s w e l l i n g the income assistance r o l l s . I t was suggested th a t those i n d i v i d u a l s who refused o f f e r s of employment, which would be extended by the government, would be denied income assistance. Before the government formulated the f i r s t of the series of laws, which l a t e r came to be known as the El i z a b e t h a n Poor Laws, there were both organized and unorganized systems of r e l i e f . Poverty was not a new co n d i t i o n f o r the majority of the people. Some of the poor coped with t h e i r poverty through begging, an a c t i v i t y which had been endorsed by the C h r i s t i a n r e l i g i o n . There e x i s t e d a firm b e l i e f t h a t the 'natural order' of so c i e t y was one i n which there would always be two 'classes' of people: the r i c h and the poor. The poor had an important r o l e to play i n the n a t u r a l order since the r i c h , through c h a r i t a b l e deeds which would b e n e f i t the poor, could demonstrate t h e i r worth as candidates f o r s a l v a t i o n . More organized e f f o r t s f o r poor r e l i e f were provided by the guilds, p r i v a t e p h i l a n t h r o p i s t s , and the church. The members of the guilds, while emphasizing s e l f - h e l p and brotherhood, undertook such "works of c h a r i t y " as d i s t r i b u t i n g food and providing s h e l t e r to the needy (de Schw e i n i t z , 194 3; p. 15). Many of the modern day service clubs are reminiscent of the old s o c i a l guilds i n that, although members come together f o r f e l l o w s h i p , or around a common i n t e r e s t , they also raise and 13 donate money to many non-profit organizations or charities. During t h i s time, p r i v a t e philanthropy also f l o u r i s h e d . "At the time of the Reformation, there were i n England not l e s s than 460 c h a r i t a b l e foundations" (de Sc h w e i n i t z , 1943; p.15). G i f t s and bequests were used f o r both poverty r e l i e f and publ i c works. Complementing both the actions of the guilds and p r i v a t e p h i l a n t h r o p i s t s , c h u r c h p a r i s h e s and the m o n a s t e r i e s c o m p l e t e d the o r g a n i z e d systems of p o v e r t y r e l i e f . As long as i n d i v i d u a l s could beg and the guilds, p h i l a n t h r o p i s t s , and churches could adequately contend with the needs of the poor, s o c i a l o r d e r was ensured. The government could remain detached from the problems and the needs of the poor. Between 1520 and 1640, the two most outstanding problems were p o v e r t y and v a g r a n c y (Pound, 1971). As the p o p u l a t i o n i n c r e a s e d , e v e n t s such as l a n d e n c l o s u r e s and h a r v e s t f a i l u r e s s w elled the numbers of the poor. "Between one-quarter and one-third of the population of most English towns were below the status of wage-owner, and at any moment their numbers were l i a b l e to be swelled by a slump i n any one of the major i n d u s t r i e s " (Pound, 1971; p. 25). Of e q u a l s i g n i f i c a n c e was the i n c r e a s e i n the numbers of r o v i n g vagrants who formed bands and moved across the countryside. Both the roving bands of vagrants and the large numbers of 14 poor began to be perceived as a t h r e a t to the f r a g i l e public order. The 'Poor Law' Statute of 1531 f i r s t attempted to deal with these dual problems by di s t i n g u i s h i n g between the 'impotent' poor, (i.e. the aged and the i n f i r m ) and the 'unworthy' poor, (i.e. those who were p r o f e s s i o n a l vagrants). Although t h i s statute made no provision for those who were prepared to work but who could not f i n d jobs, the "impotent poor ... were allowed to beg (but) only within their own community" (Pound, 1971; p. 39). However, actions against able-bodied vagrants who were caught begging were p u n i t i v e . Any able-bodied vagrants who were caught begging were to be whipped and returned to their communities. Those who harbored them would be f i n e d . The inadequacies of thi s f i r s t attempt to provide f o r the 'impotent' poor by giving them exclusive begging r i g h t s were q u i c k l y a p p a r e n t and, i n 1 536, p a r i s h and m u n i c i p a l a u t h o r i t i e s were given f u l l r e s p o n s i b i l i t y f o r providing f o r the 'impotent' poor " i n order to prevent them from wandering around as beggars" (Pound, 1971; p. 40). Each parish was to raise money on a voluntary basis to provide f o r the l o c a l i n d i g e n t . However, measures taken to c o n t r o l the vagrant population became even more repressive. The immense fear of i n s u r r e c t i o n by the poor, which must have p r e v a i l e d during t h i s time, was evidenced by the steps which were taken i n 15 order to keep the vagrant bands from increasing in size. Two c o n v i c t i o n s of v a g r a n c y , ( i . e . b e i n g w i t h o u t means and unemployed f o r t h r e e or more d a y s ) , r e s u l t e d i n the i n d i v i d u a l being branded on the forehead with a "V", before being returned to his or her home parish (Pound, 1971). Generally, p u b l i c order was f r a g i l e and precarious. There were no organized p o l i c e f o r c e s and few j a i l s when compared to the large number of poor and vagrant. To become more p u n i t i v e was a n a t u r a l r e a c t i o n on the p a r t of those i n d i v i d u a l s who were attempting to maintain s o c i a l order. By 1601, the Poor Law had been expanded to include more s t r i n g e n t d e f i n i t i o n s of v a g r a n c y , p r e s c r i p t i o n s f o r appropriate punishments, and the provision of workhouses. I t also invested "overseers of the poor" with the duty and power to set r a t e s and c o l l e c t taxes from those with means (Pound, 1971). In a d d i t i o n , poor c h i l d r e n c o u l d be bound as apprentices; i n the case of g i r l s u n t i l they were 21, and i n the case of boys, u n t i l they were 2 5. However, g i r l s could be f r e e d from such apprenticeships i f they married before they reached age 21. The elderly were provided for by making them the r e s p o n s i b i l i t y of t h e i r f a m i l i e s . Money raised by l o c a l a u t h o r i t i e s also provided pensions f o r wounded so l d i e r s (Pound 1971). The E l i z a b e t h a n l e g i s l a t i o n also included two Acts which 16 provided f o r the e r e c t i o n of hospitals and workhouses f o r the poor and defined the law of c h a r i t a b l e t r u s t s (Pound, 1971; p. 55). The s i g n i f i c a n c e of these p a r t i c u l a r developments was th a t they recognized the importance of p r i v a t e c h a r i t y f o r supplementing the a c t i v i t i e s of the st a t e . Also, they "encouraged p r i v a t e benefactors who might wish to found and endow almshouses, houses of c o r r e c t i o n and s i m i l i a r i n s t i t u t i o n s f o r the use of the poor" (Pound, 1971; p. 55). The E l i z a b e t h a n Poor Law of 1601 remained i n place f o r a p p r o x i m a t e l y 250 y e a r s and c o n t i n u e d to i n f l u e n c e the th i n k i n g of subsequent policy-makers. The Development of Social Security Programs on the Continent England was not alone i n attempting to formulate a means by which the problem of growing numbers of poor could be addressed and s o c i a l order maintained. In 1535, the town of Ypres, i n Flanders, implemented a plan to organize pri v a t e c h a r i t y as a means of maintaining the poor. Although the scheme u l t i m a t e l y i n f l u e n c e d developments i n the r e s t of Europe, i t was a l s o c o n t r o v e r s i a l s i n c e i t p r o h i b i t e d begging. Such a development threatened the Mendicant Orders who had h i s t o r i c a l l y depended on begging to m a i n t a i n themselves. The Mendicants appealed to the f a c u l t y of the Sorbonne who upheld the Ypres plan providing t h a t : the poor were not further impoverished by the ban against begging; the wealthy who gave to the common rel i e f fund did not feel that such a c t i o n discharged t h e i r t o t a l c h a r i t a b l e o b l i g a t i o n s ; 17 and, the M e n d i c a n t O r d e r s c o u l d c o n t i n u e to beg (de Sc h w e i n i t z , 194 3). In 1536, Vives, a renowned t h i n k e r and scholar, formulated a plan f o r poverty r e l i e f a t the request of the Mayor of Bruge, also i n Flanders. He proposed t h a t "Senators, by twos", v i s i t the poor, who resided at home or i n hospi t a l s , so as to determine t h e i r need and to r e g i s t e r them (de Schw e i n i t z , 1943: p. 32). Everyone should be set to work or, i f unable to f i n d work, be assigned to an a r t i s a n . Upon becoming p r o f i c i e n t , they could be granted government c o n t r a c t s f o r a v a r i e t y of public works (e.g. building roads and bridges, or manufacturing h o s p i t a l s u p p l i e s ) . Vives was of the opinion t h a t the cost of poverty r e l i e f could be reduced through job cr e a t i o n - an idea that remains r e l e v a n t today. There were c e r t a i n elements common to a l l the s i x t e e n t h century poverty r e l i e f schemes. The e r a d i c a t i o n of poverty was never the primary goal of any of the schemes. Although they r e c o g n i z e d the need to maintain the i n f i r m or l e g i t i m a t e poor, at the same time they provided f o r the co e r c i o n and punishment of able-bodied rogues and beggars. The actions taken under the ea r l y schemes were j u s t i f i e d on C h r i s t i a n p r i n c i p l e s ; however, the s h i f t i n g of r e s p o n s i b i l i t y f o r the poor from the i n d i v i d u a l to the municipal l e v e l s i g n a l l e d the beginning of the s e c u l a r i z a t i o n of poverty r e l i e f . In each 18 poverty r e l i e f scheme, there was a degree of paternalism; while the 'worthy' poor r e q u i r e d s p i r i t u a l and economic guidance, the 'unworthy* poor had to be d i s c i p l i n e d . The Legacy of the Speenhamland Act The English Speenhamland Act of 1795 was another legislative landmark which s i g n i f i c a n t l y a f f e c t e d the d i r e c t i o n taken i n the country's development toward modern s o c i a l s e c u r i t y systems. Land enclosures, i n d u s t r i a l i z a t i o n , costs associated with the war with France, and a se r i e s of poor harvests had s u c c e s s i v e l y e x a c e r b a t e d the p o s i t i o n of the poor. The magistrates of the day met at Speenhamland to consider two proposals: apply a minimum wage or "supplement the income of the l a b o u r e r " (de Schweinitz 1943; p.72). They chose to supplement the workers' wages and drew up a schedule of the amounts necessary to maintain an i n d i v i d u a l or f a m i l y , based on the current price of bread. The Act allowed i n d i v i d u a l s to r e c e i v e r e l i e f i n t h e i r homes and remained the primary method of administering r e l i e f f o r the next generation (de S c h w e i n i t z , 194 3). The Speenhamland plan for supplementing wages was a failure. The reasons t h a t i t f a i l e d are of t e n used as arguments i n curren t debates concerning the pr o v i s i o n of a guaranteed annual income. Wages were driven down as employers, knowing wages would be supplemented, o f f e r e d l ower wages or began using the impoverished workers who received a wage supplement 19 over those who were independent. More workers were fo r c e d onto the p l a n of s u p p l e m e n t a l r e l i e f , and as i n c r e a s e d numbers of workers accepted r e l i e f , the tax r a t e s e s c a l a t e d . The Speenhamland plan was considered to be responsible f o r k i l l i n g t h e l a b o u r e r s ' m o t i v a t i o n t o w o r k , or work e f f i c i e n t l y , because regardless of what they produced, they r e c e i v e d t h e i r minimum wage each week. In r e a l i t y , the primary reason the plan f a i l e d was because i t was conducted at the municipal l e v e l and was not accompanied by any other labour market r e g u l a t i o n . In a d d i t i o n , the a r t of government a d m i n i s t r a t i o n was i n i t s f l e d g l i n g days (de S c h w e i n i t z , 1943). In E n g l a n d , t h r o u g h o u t the s i x t e e n t h and s e v e n t e e n t h ce n t u r i e s , the l e v e l and extent of poverty among the lower c l a s s e s had not changed a p p r e c i a b l y . In a d d i t i o n , the approach taken to the problems of the poor and the methods of a d m i n i s t r a t i o n did not p a r a l l e l the r a p i d economic changes t h a t began to o c c u r as a r e s u l t of the i n t r o d u c t i o n of machine power. The poor laws had been an attempt to provide work f o r the poor, r e l i e v e the i n f i r m poor, prevent any increase i n the numbers of 'undeserving' poor, and maintain s o c i a l order. The Poor Law Reform Act of 1834 U n t i l the r e f o r m u l a t i o n of the poor laws i n 1834, poor r e l i e f 20 continued to be administered at the l o c a l l e v e l and parishes had responded to the burgeoning numbers of poor by j o i n i n g together to b u i l d workhouses. Although the workhouses were i n i t i a l l y intended to house indigents, provide work, and cut down on outdoor r e l i e f , they became more puni t i v e i n an attempt to deter idleness and vagrancy ( T a y l o r , 1969 ). The increase i n the cost of poor r e l i e f and numbers of poor had c o n t i n u e d t o c l i m b t h r o u g h o u t the e i g h t e e n t h c e n t u r y . Between 1776 and 1786, costs of poor r e l i e f were estimated to have increased as much as 33 percent, and in 1802, one out of every nine people was on poor r e l i e f . By 1832, the poor were driven to burning crops and rioting in o r d e r t o d e m o n s t r a t e t h e i r d i s s a t i s f a c t i o n w i t h l a n d enclosures and the i n t r o d u c t i o n of machine power. A Royal Commission was formed to i n v e s t i g a t e "the a d m i n i s t r a t i o n and p r a c t i c a l operation of the poor laws" (de S c h w e i n i t z , 1943; p. 117). There were s e v e r a l c r i t i c i s m s l e v e l l e d a t the previous attempts at poor r e l i e f . For example, the Poor Laws were s a i d t o c o n t r i b u t e t o the c r e a t i o n of p o v e r t y by removing the motivation to work. Public philanthropy was a t t a c k e d using the Malthusian argument t h a t poor laws and philanthropy encouraged poverty and increased the numbers of poor by providing them with the resources necessary to allow them to reproduce. In 1798, Malthus, had argued that the poor, who were kept a l i v e by c h a r i t y , would reproduce at a rate which could not be sustained by the current l e v e l of 21 a g r i c u l t u r a l production, thereby i n c r e a s i n g t h e i r numbers and worsening t h e i r s i t u a t i o n i n the long term. He maintained that the Poor Laws should be abolished so as to teach the poor to depend upon themselves. Although his argument flew in the face of t r a d i t i o n , i t coincided with the t h i n k i n g of those i n d i v i d u a l s who did not wish to put a d d i t i o n a l money into poverty r e l i e f . A f t e r a two y e a r i n v e s t i g a t i o n , the R o y a l Commission's recommendations were embodied i n a s t a t u t e t h a t was more repressive than any of i t s predecessors - the Poor Law Reform Act of 1834. The primary v e h i c l e f o r reducing the cost of poor r e l i e f , and d e t e r r i n g those who may wish to apply, was the workhouse, which was to be regulated by standards set at the n a t i o n a l l e v e l . Jeremy Bentham, a U t i l i t a r i a n and contemporary of Malthus, had envisioned the p o s s i b i l i t y of a p e r f e c t s o c i e t y . He based his system of "m o r a l i t y , law, economics and p o l i t i c s on the strength of p o s i t i v e u n i v e r s a l laws of nature" (Greenberg, 1981; p. 256). U t i l i z i n g such n a t u r a l l a w s , the U t i l i t a r i a n s i m a g i n e d t h a t t h e y c o u l d c o n s t r u c t a s c i e n c e of s o c i e t y as e x a c t as Newton's explanation of the p h y s i c a l universe. According to Mishra (1984), the s o c i a l s c i e n t i s t s of the 1960's also focussed on f o r m u l a t i n g a s c i e n c e of s o c i e t y i n o r d e r to b e t t e r understand the c u r r e n t s o c i a l problems. 22 Bentham, along with Malthus, had c r i t i c i z e d the o l d Poor Laws. He had suggested the answer to poverty r e l i e f was a network, of workhouses established on the p r i n c i p l e s of 'less e l i g i b i l i t y ' . The conditions inside the workhouse had to be c a r e f u l l y c a l c u l a t e d t o r e m a i n l e s s b e n e f i c i a l t h a n conditions on the outside, thus ensuring t h a t only those who could not secure re l i e f from any other source would seek them out. The Royal Commission's recommendations incorporated the n o t i o n of 'less e l i g i b i l i t y ' and a l s o a p p l i e d i t to the i n d i v i d u a l . The c o n d i t i o n of the poor person must always be l e s s d e s i r a b l e or c o m f o r t a b l e than the c o n d i t i o n of the lowest paid worker who was not receiving any form of poverty r e l i e f (de S c h w e i n i t z , 1943). The Poor Law Act of 1834 dissolved any idea t h a t the s t a t e had an o b l i g a t i o n to support the able-bodied (or employable) poor. While a d e c i s i o n to not p r o v i d e p o v e r t y r e l i e f , e s p e c i a l l y to the o l d or i n f i r m poor, would have been tantamount to advocating murder, the employment of the p r i n c i p l e of 'less e l i g i b i l i t y ' was a way to circumvent the moral issues which would have arisen i f r e l i e f had been withdrawn altogether. P o l a n y i (1964) points out that the Poor Law Reform Act was the mechanism t h a t provided f o r England's t r a n s i t i o n to a market economy and, t h e r e f o r e , marks the s t a r t i n g point of modern c a p i t a l i s m i n t h a t country. For example, c e r t a i n 23 c o n d i t i o n s were n e c e s s a r y f o r t h e d e v e l o p m e n t and reproduction of i n d u s t r i a l c a p i t a l i s m , notably: (i) a labour market c o n s i s t i n g of w o r k e r s who c o u l d s u r v i v e o n l y by s e l l i n g t h e i r l a b o u r ; ( i i ) p r e d i c t a b i l i t y and r a t i o n a l i t y embodied i n a l e g a l system that could reproduce order; ( i i i ) the concept of p r i v a t e property; (iv) p r i v a t e ownership of the means of production; (v) unequal exchange which produced s u r p l u s v a l u e ( p r o f i t s ) f o r the owners of the means of p r o d u c t i o n ; ( v i ) a l e g i t i m a t e s t a t e r e g u l a t i n g s o c i a l c o n ditions and f a c i l i t a t i n g i n t e r n a t i o n a l trade; and ( v i i ) an i d e o l o g y of " i n d i v i d u a l i t y 1 as opposed to ' c o l l e c t i v i t y 1 . While most of these c o n d i t i o n s had been p a r t i a l l y or completely met in England by 1834, the Speenhamland Act had e f f e c t i v e l y prevented the formation of a labour pool by removing any impetus to work i n order to s a t i s f y basic needs. While the Speenhamland A c t had c h a r g e d the p a r i s h or community with the r e s p o n s i b i l i t y f o r maintaining the poor, the Reform Act of 1834, administered at the n a t i o n a l l e v e l , attempted to make r e l i e f a v a i l a b l e only inside the workhouse and t h e r e b y e f f e c t i v e l y s h i f t e d the r e s p o n s i b i l i t y f o r personal maintenance to the i n d i v i d u a l who had to r e l y on his or her own devices. The legacy of the E l i z a b e t h a n Poor Laws, and subsequent legislation, which was brought to Canada by resettling Anglo-Europeans, was composed p r i m a r i l y of the f o l l o w i n g elements: 24 (i) the f a m i l y was p r i m a r i l y responsible f o r the well-being of i t s members, ( i i ) i f the family could not provide, the poor were the r e s p o n s i b i l i t y of l o c a l government; ( i i i ) the b e l i e f t h a t the value of any assistance, which was r e c e i v e d by the poor, must be below any prevailing minimum wage; and, (iv) the b e l i e f t h a t there were 'worthy' and 'unworthy' poor (Clague et a l , 1984). Current r e f e r e n c e to 'welfare bums' and the f a c t t h a t present day assistance l e v e l s are kept below the minimum wage provide compelling evidence t h a t old ideas 'die hard'. Canada After Confederation In Canada, a system of social welfare benefits evolved slowly and was a r e f l e c t i o n of both h i s t o r i c a l f a c t o r s and the p r e v a i l i n g economic, p o l i t i c a l and i d e o l o g i c a l circumstances. Guest (198 5 ) p o i n t s out t h a t , w e l l i n t o the t w e n t i e t h century, individuals who experienced unemployment or economic c r i s i s i n t h e i r f a m i l i e s had two a l t e r n a t i v e s . They could seek relief from their extended family members or turn to the p r i v a t e m a r k e t - p l a c e f o r employment, c r e d i t or l o a n s . Although the Brit i s h North America Act of 18 67 had turned the r e s p o n s i b i l i t y f o r the indigent over to i n d i v i d u a l provinces, r e l i e f remained at the municipal l e v e l . "More o f t e n than not, the i n d i v i d u a l would be r e f e r r e d to some ch a r i t a b l e agency for temporary help, as municipal departments of public assistance were the exception r a t h e r than the r u l e " (Guest, 1985; p. 1). 25 This 'residual' concept of s o c i a l s e c u r i t y , or the notion that r e l i e f was to be given to an i n d i v i d u a l only when a l l other avenues were exhausted, continued i n t o the 1920's. The p r e v a i l i n g ideology supported and r e f l e c t e d the b e l i e f that the i n d u s t r i o u s i n d i v i d u a l could s a t i s f y his or her needs through the market-place and t h a t i t was only necessary f o r the i n d i v i d u a l to p r a c t i c e the " h a b i t s of i n d u s t r y and t h r i f t " (Guest, 1985; p. 3). The b e l i e f t h a t s o c i a l s e c u r i t y programs s h o u l d p l a y a r e s i d u a l r o l e complemented the p r e v a i l i n g l a i s s e z - f a i r e theory of p o l i t i c a l economy; that i s , "the l e a s t government i s the best government" (Guest, 1985; p. 2). This c l a s s i c , l i b e r a l ideology stressed the v a l u e of the p e r s o n a l e f f o r t s and s e l f - r e l i a n c e of the i n d i v i d u a l w i t h i n a free market which operated with minimum government interference. Although some reformers recognized that a large percentage of people were f o r c e d to l i v e below the p o v e r t y l i n e (not because they were s l o t h f u l , but r a t h e r , as a r e s u l t of the vagaries of the market economy) i t took the depression of the 1930's and the advent of World War I I to f o r c e a change i n p r e v a i l i n g a t t i t u d e s r e g a r d i n g r e s i d u a l p o v e r t y r e l i e f (Guest, 1985). As the depression worsened the economic s i t u a t i o n of large numbers of i n d i v i d u a l s (through no f a u l t of t h e i r own), the d i v i s i o n of the poor i n t o two categories 26 (i.e., the 'deserving' and the 'undeserving'), broke down (Turner and Turner, 1981). The concept of i n s t i t u t i o n a l welfare developed p a r t l y as a r e s u l t of the i d e o l o g i c a l transformation which f o l l o w e d these two major w o r l d e v e n t s . The i n s t i t u t i o n a l a p p r o a c h "resu l t e d from the growing r e c o g n i t i o n t h a t because of the nature of s o c i a l o r g a n i z a t i o n i n an u r b a n - i n d u s t r i a l s o c i e t y , the r i s k s to an i n d i v i d u a l ' s s o c i a l s e c u r i t y are part of the s o c i a l cost of operating a s o c i e t y " (Guest, 1985; p. 2). Therefore, the s o c i a l cost of progress should be borne by the c o l l e c t i v e as opposed to the i n d i v i d u a l . The Emergence of the Canadian Welfare State The 'welfare s t a t e ' was as much a c h i l d of c e r t a i n p o l i t i c a l and economic developments as i t was the r e s u l t of a populist notion encompassing e g a l i t a r i a n and humanitarian i d e a l s . The devastation reaped on the Canadian populace by the depression of the 1930's has been both documented i n o f f i c i a l s t a t i s t i c s and recorded i n the o r a l h i s t o r i e s of the period. F o l l o w i n g on the heels of the depression, "the war p r e c i p i t a t e d a massive i n d u s t r i a l m o b i l i z a t i o n , organized and co-ordinated by the s t a t e , which r e s t o r e d the v a l i d i t y and dynamism of world c a p i t a l i s m with a r a p i d i t y i n c o n c e i v a b l e at the height of the depression" (Wolfe, 1984; p. 46). The t r a d i t i o n a l view t h a t the state should play only a l i m i t e d p o l i t i c a l and economic role was replaced by a consensus that, i n order to 27 minimize any periods of low employment and to avoid recession f o l l o w i n g the war, the s t a t e should remain a c t i v e l y i n v o l v e d in managing the economy. Born from the consensus among l a b o u r , b u s i n e s s and government, the 'welfare s t a t e ' was t h e o r e t i c a l l y j u s t i f i e d by Keynes* macro-economic p o l i c i e s . Businessmen softened t h e i r l a i s s e z - f a i r e s t a n c e when the y c o u n t e d the huge p r o f i t s t h a t they had a c c u m u l a t e d as a r e s u l t of the government's d i r e c t i n t e r v e n t i o n during the war. Labour looked to government to guarantee the jobs and wages which had r e s u l t e d from the f u l l - s c a l e m o b i l i z a t i o n of i n d u s t r i e s . The government, fearing the labour unrest which may have been fulminated by the increased size and s t r e n g t h of the labour f o r c e , "engineered a dramatic change i n p o l i c y with respect to planning f o r post-war r e c o n s t r u c t i o n and the i n t r o d u c t i o n of s o c i a l welfare programs" (Wolfe, 1984; p. 50). Canada was one of the f i r s t advanced c a p i t a l i s t c o u n t r i e s to employ the principles of Keynes' theory; however, "government leaders and t h e i r economic p o l i c y - a d v i s o r s fashioned a unique Canadian synthesis of the more general Keynesian theory with the t r a d i t i o n a l s t a p l e s a p p r o a c h to C a n a d i a n economic development" (Wolfe, 1984; p. 48). Traces of Keynesian theory can be d e t e c t e d i n government budgets as e a r l y as 1938. However, by 1943, Prime M i n i s t e r Mackenzie King had 28 employed a group of young Keynesian economists who would eve n t u a l l y disseminate the theory throughout the f e d e r a l bureaucracy. The depression of the 1930's had r e f u t e d the p r e v a i l i n g f r e e market and price theory, and although Keynes' theory included these concepts, i t also focussed on the aggregate f a c t o r s of gross n a t i o n a l p r o d u c t , n a t i o n a l i ncome, i n v e s t m e n t s , government expenditures and volume of employment. Keynes c o n t e n d e d t h a t d e p r e s s i o n was c a u s e d by a d e f i c i e n t , aggregate demand; t h a t i s , the combined expenditures of government and the pri v a t e s e c t o r were too small to create universal employment (Gamble and Walton, 1976). The two c r u c i a l f a c t o r s i n Keynes' equation f o r economic growth were consumer spending and investment. Consumer spending would, quite simply, increase as incomes increased. However, i f d o u b t f u l i n v e s t o r s f a i l e d to i n v e s t , economic growth would either slow or not occur at a l l . When economic g r o w t h s l o w e d , an i n j e c t i o n of c a p i t a l would s t i m u l a t e investment and production, which would u l t i m a t e l y provide more employment; as a consequence, n a t i o n a l incomes would r i s e . Eckstein (1965) explains the effects that government spending has on n a t i o n a l incomes i n very simple terms. Any increase i n government spending w i l l r a i s e the gross n a t i o n a l product 29 by an amount determined by the ' m u l t i p l i e r e f f e c t ' . I f the government spends one e x t r a d o l l a r by purchasing goods or s e r v i c e s , the d o l l a r is r e c e i v e d by households as income i n the form of wages, rents or i n t e r e s t ; by the businessman i n the form of p r o f i t s ; and, a portion is returned to government as taxes. However, each party, while r e t a i n i n g some portion of t h e i r share of the d o l l a r , w i l l put the balance back into c i r c u l a t i o n and another spending c y c l e w i l l begin. To use E c k s t e i n ' s example, assume t h a t h o u s e h o l d s / i n d i v i d u a l s r e c e i v e s i x t y cents of the o r i g i n a l d o l l a r while government and business r e c e i v e f o r t y cents. The households spend ninety cents of each a d d i t i o n a l d o l l a r while business and government spend none of t h e i r e x t r a income. Consumers w i l l spend f i f t y - f o u r cents out of the f i r s t s i x t y cents they r e c e i v e . Provided t h a t the f i f t y four cents i s divided i n the same manner as the o r i g i n a l d o l l a r , the second round of s p e n d i n g w i l l y i e l d households an a d d i t i o n a l t h i r t y - t w o cents. I f the spending c y c l e continues i n the same pat t e r n , the o r i g i n a l d o l l a r spent by government on goods and s e r v i c e s w i l l increase the gross n a t i o n a l product by $2.18 ( E c k s t e i n , 1965; p. 86). L i k e w i s e , E c k s t e i n points out, any increase i n taxes reduces the gross n a t i o n a l product by the s i z e of the ' m u l t i p l i e r e f f e c t ' . However, using the same example, the gross n a t i o n a l product i s reduced by only $1.18. This is because, although 30 spending on the f i r s t round was reduced by t a x a t i o n i n the same proportion as spending on the f i r s t round was i n c r e a s e d by the government p u r c h a s i n g one d o l l a r of goods and s e r v i c e s , "the i n i t i a l round of tax payment was simply a t r a n s f e r of purchasing power, which does not count as gross n a t i o n a l product" (Echstein, 1965; p. 87). S i n c e i n v e s t m e n t i s c r u c i a l to the i n v e s t m e n t - s p e n d i n g -investment c y c l e , Keynes proposed t h a t the s t a t e should assume the r e s p o n s i b i l i t y f o r r e v i v i n g i n t e r e s t i n investment during the c r i t i c a l times when i n v e s t o r s were holding back t h e i r money. Keynes suggested that, i n order to f i l l the demand f o r i n v e s t m e n t c a p i t a l , the government s h o u l d undertake p r o j e c t s by borrowing money from the banks, which would be repaid at a la t e r date with tax money. In addition, Keynes' theory not only justified higher wages for workers on the basis t h a t such wages sustained l e v e l s of aggregate demand, i t also " l e g i t i m a t e d higher l e v e l s of spending on s o c i a l i n s u r a n c e , n o t as c h a r i t y , b u t as a u t o m a t i c s t a b i l i z e r s b u i l t i n t o the economy, which would buoy up aggregate demand i n periods of c y c l i c a l downturn" (Wolfe, 1984; p. 48). Therefore, the 'welfare s t a t e ' was, i n part, a concrete and l o g i c a l extension of the Keynesian model. The post-war r e c o n s t r u c t i o n plans of the King a d m i n i s t r a t i o n were o u t l i n e d i n the Throne Speech i n 1944. I t was declared that "the primary object of post-war domestic policy would be 31 s o c i a l s e c u r i t y and human welf a r e " (Wolfe, 1984; p. 54). According to Wolfe: "The government committed i t s e l f to aim for the establishment of a n a t i o n a l minimum of s o c i a l s e c u r i t y with regard to such matters as employment, nutrition, housing, and protection from unemployment, the effects of a c c i d e n t , i l l health, and o l d age. In sum, the speech was far-reaching and innovative in the degree of government involvement i t promised in order to ease the t r a n s i t i o n from wartime to peace, to guarantee f u l l employment in the post-war economy, and to provide a n a t i o n a l minimum of s o c i a l s e c u r i t y f o r a l l Canadians" (Wolfe, 1984; p. 54). Post-war r e c o n s t r u c t i o n planning continued and, i n 1945, the government issued the White Paper on Employment and Income. The White Paper was the f i r s t p u blic document to r e c o r d the government's a d o p t i o n of the K e y n e s i a n p r i n c i p l e s "of c o u n t e r - c y c l i c a l f i s c a l p o l i c y and the idea that i t should construct i t s budgets with an aim to safeguarding the economy against r e c u r r e n t i n f l a t i o n and d e f l a t i o n " (Wolfe, 1984; p. 54). However, i t a l s o s t r e s s e d Canada's r e l i a n c e on maintaining high l e v e l s of exports i n order to ensure f u l l employment and economic growth. Keynesian economic policies continued i n favour u n t i l 1975 and, during t h i s time, a 'welfare s t a t e ' based on the o r i g i n a l post-war r e c o n s t r u c t i o n plans, continued to endure and to expand. The Nature and Functions of the Welfare State Accounts of the nature and functions of the modern welfare s t a t e have been o f f e r e d by w r i t e r s whose v i e w s r e f l e c t 32 d i f f e r e n t i d e o l o g i c a l perspectives. Drover and Woodsworth (1978) r e f e r to these d i f f e r e n t accounts and i d e o l o g i c a l perspectives as "welfare paradigms".1 For example, a popular and (perhaps dominant) view of s o c i a l welfare considers i t to be an humanitarian attempt to improve the q u a l i t y of l i f e i n a s o c i e t y . T h i s quest i s based on a number of v a l u e s i n c l u d i n g , "concern f o r the i n d i v i d u a l , f a i t h i n man, f a i t h i n democracy, e q u a l i t y and equity, and s o c i a l j u s t i c e i n the community" ( A r m i t a g e , 1 975; p. 1). S e v e r a l i d e o l o g i e s underpin the work of c o n t r i b u t o r s to t h i s 'benign' view of s o c i a l welfare and, i n turn, these i d e o l o g i e s are r e f l e c t e d i n the attendant theories of s o c i a l welfare. On the other hand, the benign view is c r i t i c i z e d by neo-Marxist t h e o r i s t s who contend t h a t s o c i a l welfare systems s e r v e t o l e g i t i m i z e the c a p i t a l i s t s t a t e and c a p i t a l i s t system as w e l l as serving a " s o c i a l c o n t r o l " f u n c t i o n (see, e.g., Gough, 1979). A welfare s t a t e i s necessary i n order to compensate f o r the b l a t a n t i n e q u a l i t i e s which are spawned by the c a p i t a l i s t system (O'Connor, 1973). The f i r s t " w e l f a r e p a r a d i g m " t o be examined has been va r i o u s l y l a b e l l e d : "rugged i n d i v i d u a l i s m " (Djao, 1983 ), " a n t i - c o l l e c t i v i s t " (George and Wilding, 1976) or "welfare economics" (Drover and Woodsworth, 1978). This perspective focusses on i n d i v i d u a l i n i t i a t i v e and d r i v e , operating wi t h i n a competitive p r i v a t e enterprise system. I t c l e a r l y r e f l e c t s 33 i t s o r i g i n s i n c l a s s i c l i b e r a l i s m s i n c e the i n d i v i d u a l i s deemed to be pre-eminent. Competition among i n d i v i d u a l s is viewed as a means of c r e a t i n g happiness, and u n f e t t e r e d exchange with i n the market place i s considered the best v e h i c l e f o r e n s u r i n g t h e m a x i m i z a t i o n o f w e l f a r e . Consequently, s o c i a l welfare does not f a l l under the purview of the st a t e . In f a c t , the role of the s t a t e is tha t of " r u l e - m a k e r and umpire, d e f i n i n g and e n f o r c i n g p r i v a t e property r i g h t s , providing a stable monetary framework, preventing the formation of monopolies, and providing the n e c e s s a r y goods and s e r v i c e s t h a t c a n n o t be consumed i n d i v i d u a l l y , but which n e c e s s a r i l y b e n e f i t a l l members of so c i e t y (i.e. defense and n a t i o n a l S e c u r i t y ) " (Djao, 1983; p. 38 ). A second welfare paradigm has also been variously labelled as " m o d i f i e d i n d i v i d u a l i s m " ( D j a o , 1 9 8 3 ) , " r e l u c t a n t c o l l e c t i v i s m " (George and W i l d i n g , 1 976 ) or " l i b e r a l w e l f a r i s m " ( D r o v e r and Woodsworth, 1978 ). While t h i s paradigm upholds the c e n t r a l t e n e t s of i n d i v i d u a l i s m , l i b e r t y , and competitive c a p i t a l i s m , the perspect i v e i n c l u d e s a concern f o r the undesirable e f f e c t s of ca p i t a l i s m on the i n d i v i d u a l . B e v e r i d g e , i n G r e a t B r i t a i n , and Marsh i n Canada, epitomized t h i s perspective with t h e i r concern t h a t i n d i v i d u a l s be free from want, disease, ignorance, squalor and idleness. I t i s recognized t h a t c a p i t a l i s m creates and 34 perpetuates i n e q u a l i t y and the role of the government is to regulate c a p i t a l i s m and provide a safety net f o r i n d i v i d u a l s affected by the c y c l i c a l vagaries of the economic system. Within t h i s paradigm, the " t e c h n o l o g i c a l determinism" or "modernization" theory provides an explanation for the growth of t h e w e l f a r e s t a t e . The t h e o r y s u g g e s t s t h a t i n d u s t r i a l i z a t i o n is a n a t u r a l process i n the development of the human race (Djao, 1983). As a n a t u r a l by-product of i n d u s t r i a l i z a t i o n , s o c i a l welfare serves to ameliorate the e f f e c t s of i n d u s t r i a l i z a t i o n and u r b a n i z a t i o n on the i n d i v i d u a l . Although the r a t e and pace of i n d u s t r i a l i z a t i o n may be d i f f e r e n t i n various s o c i e t i e s , the development of s o c i a l w e l f a r e p o l i c y w i l l p a r a l l e l t h e g r o w t h of i n d u s t r i a l i z a t i o n . F i n a l l y , a t h i r d , major w e l f a r e paradigm t h a t bears examination i s that of s o c i a l democracy. The extension and growth of s o c i a l welfare programs is seen as p a r a l l e l i n g the extension of " c i v i l " , " p o l i t i c a l " and " s o c i a l " c i t i z e n s h i p among members of a s o c i e t y ( R o c h e f o r t , 1981; p. 572). C i v i l c i t i z e n s h i p , the most elemental form, i n c l u d e s "the basic r i g h t s of i n d i v i d u a l freedom, such as freedom of speech and r e l i g i o n , the r i g h t to own property and to r e c e i v e equal j u s t i c e " ( R o c h e f o r t , 1981; p. 572). This developed during the 18th century. " P o l i t i c a l " c i t i z e n s h i p developed during the 19th century with the beginning of what l a t e r became 35 u n i v e r s a l enfranchisement. T.H. Marshall, a proponent of t h i s p a r t i c u l a r p e r s p e c t i v e , suggested t h a t the concept of c i t i z e n s h i p f i n a l l y expanded to include the " r i g h t to share to the f u l l i n the s o c i a l heritage and to l i v e the l i f e of a c i v i l i z e d being according to the standards p r e v a i l i n g i n s o c i e t y " ( R o c h e f o r t , 1981; p. 572). As the concept of c i t i z e n s h i p p r o g r e s s e s t h r o u g h i t s v a r i o u s s t a g e s , the concept of s o c i a l welfare expands and becomes more l i b e r a l and l e s s s t i g m a t i z i n g . Although not e x p l i c i t l y s t a t e d , i t would appear t h a t a t each s t a g e i n the d e v e l o p m e n t of c i t i z e n s h i p , the r o l e of the s t a t e would expand and i t s functions would be modified. T i t m u s s championed the s o c i a l d e m o c r a t i c p o s i t i o n . He s u g g e s t e d t h a t the " p o s s e s s i v e i n d i v i d u a l i s m of market c a p i t a l " i s u n a c c e p t a b l e i n the s o c i a l w e l f a r e f i e l d (Titmuss, 1977 ). A l t r u i s m , on the part of each i n d i v i d u a l i n a s o c i e t y , would promote the i n d i v i d u a l ' s sense of worth and promote the f e e l i n g of community, t h e r e b y r e d u c i n g a l i e n a t i o n . Within s o c i a l democracy, the s t a t e plays a major role i n r e d i s t r i b u t i n g b e n e f i t s , r e g u l a t i n g the economy and providing cohesion f o r a s o c i e t y f r a c t u r e d by c a p i t a l i s m . One of the most pow e r f u l c r i t i q u e s of the welfare state to emerge r e c e n t l y has been t h a t o f f e r e d by n e o - M a r x i s t s t h e o r i s t s . This p o s i t i o n has been epitomized by the work of 36 Ian Gough (1979). In Gough's view, the welfare s t a t e i s a c o n t r a d i c t o r y phenomenon that s a t i s f i e s the imperatives to which the s t a t e i s obliged to respond as a consequence of i t s place i n the s t r u c t u r e of c a p i t a l i s m . While c o n v e n t i o n a l views of the welfare s t a t e h i g h l i g h t the humanistic and c i v i l i z i n g a s p e c t s , f o r n e o - M a r x i s t s t h e r e i s a n o t h e r , somewhat darker, side to the coin. Since the c a p i t a l i s t s t a t e i s r e q u i r e d t o s i m u l t a n e o u s l y m a i n t a i n o r d e r , l e g i t i m i z e both i t s e l f and the c a p i t a l i s t economic system, and e s t a b l i s h t h e c o n d i t i o n s n e c e s s a r y f o r c a p i t a l accumulation ( p o t e n t i a l l y c o n t r a d i c t o r y t a s k s ) , the s t a t e employs a l l means a v a i l a b l e to a c h i e v e i t s s t r u c t u r a l l y d e t e r m i n e d g o a l s . In t h i s r e g a r d , the p u b l i c w e l f a r e component of the state's i n f r a s t r u c t u r e i s e x c e p t i o n a l l y u s e f u l since i t can simultaneously s a t i s f y a l l three goals. The C r i s i s of the Welfare State In the 1970's, a s e r i e s of w o r l d e v e n t s c o n v e r g e d and manifested themselves as a g l o b a l r e c e s s i o n . Mishra (1984) has enumerated the signs of trouble which were apparent t h r o u g h o u t the w e l f a r e s t a t e s of Western i n d u s t r i a l i z e d c o u ntries: (i) high unemployment coupled with i n f l a t i o n ; ( i i ) the end of economic growth; ( i i i ) a f i s c a l c r i s i s of the s t a t e ; (iv) a r e d u c t i o n i n the resources a l l o c a t e d to s o c i a l s e r v i c e s ; and, (v) a general f e e l i n g of d i s s a t i s f a c t i o n with the government. 37 Although Canada, f o r example, had experienced some slow g r o w t h or r e c e s s i o n a r y p e r i o d s s i n c e the war, the deep troughs and s p i r a l l i n g highs of the "boom-bust" c y c l e s of capitalism had been somewhat smoothed through the application of K e y n e s i a n c o u n t e r - c y c l i c a l f i s c a l p o l i c i e s . Keynes' theory, which he had advocated be used only during d i f f i c u l t economic times, had been applied whenever the s l i g h t e s t t h r e a t to the economy had a r i s e n . However, i n the mid-1970's, a set of economic and s o c i a l f a c t o r s converged to create a s i t u a t i o n which, according to economic t h e o r i s t s , was highly unlikely: simultaneous high levels of unemployment and i n f l a t i o n (i . e . , ' s t a g f l a t i o n ' ) . In Great Britain, the United States, and Canada, the strategy f o r coping with a growing budget d e f i c i t i n v o l v e d severe reductions i n government spending f o r t i f i e d by the emergence of a neo-conservative ideology. Unfortunately, the need to reduce government spending coincided with other factors such as severe unemployment (which conceivably had been engineered as a s t r a t e g y f o r c o p i n g w i t h i n f l a t i o n ) . In these c o u n t r i e s , the government f a c e d p r e s s u r e from v a r i o u s sources: (i) the demands to reduce government expenditures to c o n t r o l debt i n order to deal with the f i s c a l c r i s i s ; and, ( i i ) an incr e a s e d demand f o r public s e r v i c e s , e s p e c i a l l y d i r e c t t r a n s f e r payments such as unemployment insurance and welfare. A d d i t i o n a l l y , there was a demand, not only f o r 38 t r a d i t i o n a l s e r v i c e s , but also f o r more r e c e n t l y developed programs which also consumed resources; f o r example, human r i g h t s , l e g a l a i d , ombudsmen, and s e r v i c e s to various ethnic groups. The government was also faced with the task of r e v i t a l i z i n g the economy. These multiple demands were met, i n part, by adopting a combination of monetarism and supply-side economic p o l i c i e s . The general p r i n c i p l e of monetarism i s t h a t i n f l a t i o n i s l i n k e d to the r a t e at which the supply of money grows. S p e c i f i c a l l y , i f a s t a t e bank increases the money supply i n excess of the growth of the output of goods and s e r v i c e s , p r i c e s w i l l i n c r ease. However, i f the money supply i s kept below the value of goods and s e r v i c e output, p r i c e s w i l l d e c l i n e . Therefore, s t a b i l i t y i n the economy flows from pegging the money supply to the value of the output of goods and s e r v i c e s . While i n f l a t i o n holds the c e n t e r stage, monetarists consider unemployment to be a market problem. As unemployment increases, workers w i l l accept employment t h a t pays lower wages and, i n any event, there e x i s t s a 'natural' l e v e l of unemployment. Massive unemployment must be t o l e r a t e d i n o r d e r t o c o n t r o l i n f l a t i o n and the i m p l e m e n t a t i o n of unemployment insurance programs and minimum wage legislation i n t e r f e r e s with the market forces (Crane, 1981). According to the theory, i f the market is 'free', (i.e., constrained 39 only by minimal l e g i s l a t i o n ) , i t w i l l c o n t r o l and balance i t s e l f over the long term. In t h i s regard, contemporary monetarists echo the suggestions made by Adam Smith i n the 1800's. From the l a t e 1940's, u n t i l the demise of Keynesian p o l i c i e s in the mid-197O's, the Canadian government had, from time to time and on a l i m i t e d basis, implemented c e r t a i n p r i n c i p l e s of monetarism. For example, from the la t e 1940's onwards, developments in the Canadian economy reflected the country's dependence on maintaining i t s pre-war l e v e l of exports i n order to sustain continued growth. By the 1950's, Canada was exporting 20 percent more of i t s t o t a l resources to the U n i t e d S t a t e s . At the same t i m e , "the r i s i n g l e v e l of exports was accompanied by a large amount of United States d i r e c t investment i n the Canadian economy" (Wolfe, 1984; p. 60). The United States investment was accompanied by a high volume of imports, and the combination of United States investment and imports, c r e a t e d a i n f l a t i o n a r y c y c l e . In 1954, f e a r i n g an economic downturn but r e l u c t a n t to apply K e y n e s i a n p r i n c i p l e s f o r f e a r of i n c r e a s i n g the r a t e of i n f l a t i o n , the government began to "place a g r e a t e r r e l i a n c e on monetary p o l i c y as a s u p p l e m e n t a r y i n s t r u m e n t of s t a b i l i z a t i o n " (Wolfe, 1984; p. 61). The Governor of the Bank of Canada blamed i n f l a t i o n on the 40 large amount of American investment d o l l a r s which were fl o w i n g i n t o Canada. Consequently, he began to curb the money supply to r e s t r i c t the amount of money available. "The success of t h i s p o l i c y produced a decline i n the r a t e of i n f l a t i o n by 1957; however, i t c o i n c i d e d with a f a l l i n the rate of investment, which s i g n a l l e d the onset of the f i r s t major p o s t - w a r r e c e s s i o n " ( W o l f e , 1 984; p. 61). The r e c e s s i o n ended i n 1 963 and by the mid-1 960's, L i b e r a l government policy-makers once again adopted more expansionary economic p o l i c i e s and turned t h e i r a t t e n t i o n to achieving the goal of full-employment. Although, p r e v i o u s l y , there had been several such attempts to curb the money supply, in 197 5, the government o f f i c i a l l y adopted monetarism as the primary e conomic s t r a t e g y . T h i s e v e n t s i g n a l l e d the end of the Keynesian era (Wolfe, 1984). The monetarists, who had been waging war against Keynesian economic policies since the mid-1960's, f i n a l l y moved to the f o r e f r o n t of economic p o l i c y making. By a d o p t i n g m o n e t a r i s t economic p o l i c i e s , Canada was f o l l o w i n g the lead of governments i n other parts of the w o r l d . A l t h o u g h T h a t c h e r , i n the U n i t e d Kingdom, has c o n s i s t e n t l y favoured monetarism since her e l e c t i o n i n the 1970's, at the beginning of his term, Reagan implemented economic p o l i c i e s which r e f l e c t e d a mixture of supply-side and monetarist p r i n c i p l e s . Supply-side economics o r i g i n a t e d in the 19th century with the French economist Jean Baptiste 41 Say. He contended t h a t "there can never be a shortage of purchasing power i n the economy, because supply creates i t s own demand" (Crane, 1981; p. 3). Keynes had rejected "Say's Law" because he foresaw t h a t b o t h p r o d u c t i v i t y and unemployment could s t a b i l i z e at very low l e v e l s . Supply-siders suggest that economic recovery w i l l flow from: (i) reducing personal and business taxes i n order to s t i m u l a t e savings and investment; and, ( i i ) government d e - r e g u l a t i o n , which w i l l promote e n t r e p r e n e u r i a l a c t i v i t y . Any d e f i c i t which i s i n i t i a l l y i n c u r r e d through reducing personal and business taxes w i l l be compensated f o r by the speed with which new economic development w i l l occur. Although both monetarists and supply-siders suggest t h a t t h e i r t h e o r i e s hold the key to promoting economic growth, they employ some methods which are diametrically opposed. By t i g h t l y c o n t r o l l i n g the supply of money, the monetarists deliberately attempt to produce a slow, but sustained, growth over the long-term. While income is r e d i s t r i b u t e d upward to those i n higher-income brackets and toward c a p i t a l , the e f f i c i e n c y of the labour market is increased through t i g h t l y c o n t r o l l i n g such d i r e c t t r a n s f e r payments as Unemployment Insurance. By keeping wages down, the demand fo r goods is reduced and i n f l a t i o n is kept under c o n t r o l . On the other hand, the supply-siders would flood the market with goods i n order to create demand which, subsequently, would encourage 42 investment and development. Although Keynesians and monetarists " o f f e r r i v a l p o l i t i c a l -e c o nomic s t r a t e g i e s f o r managing the most i m p o r t a n t contemporary economic problem - i n f l a t i o n " , the split between them "has become a disagreement over the nature and role of the s t a t e s e c t o r and t h r e a t e n s the maintenance of the consensus on running the mixed economy" (Gamble and Walton, 1976; pp. 63 and 64). Keynesians are of the opinion that the government should play an i n t e r v e n t i o n i s t r o l e i n order to c o n t r o l i n f l a t i o n and maintain f u l l employment. However, m o n e t a r i s t s p l a c e t h e i r f a i t h i n a f r e e and c o m p e t i t i v e market and the emphasis on c o n t r o l l i n g the money supply. Monetarists i n s i s t t hat present governments have become so l a r g e t h a t t h e y are u n w i e l d y and, t h e r e f o r e , must be 'downsized'. However, a l l e v i a t i n g unemployment is not the r e s p o n s i b i l i t y of any government, no matter what i t s s i z e . Economic p o l i c i e s remain the domain of the market place which, i f l e f t alone, w i l l c o n t i n u a l l y s e l f - a d j u s t . To summarize, the adoption of a combination of monetarism and s u p p l y - s i d e e c o nomic p o l i c i e s r e s u l t e d i n a r a d i c a l l y d i f f e r e n t approach to the problem of ' s t a g f l a t i o n ' from that taken by Keynesians. In the monetarist's system, there is a very l i m i t e d place f o r a s o c i a l welfare system aimed at r e d i s t r i b u t i n g wealth to the poor, and based on concerns f o r the i n d i v i d u a l , e q u a l i t y and equity, and s o c i a l j u s t i c e . The 43 r o l e of the st a t e no longer encompasses the p r o v i s i o n of ' w e l f a r e ' ( i n the b r o a d s e n s e ) , but i s r e s t r i c t e d to c o n t r o l l i n g the money s u p p l y , b a l a n c i n g the budget by spending what i t can ra i s e through taxes, and reducing s o c i a l expenditures. The l e g i t i m a t i o n f o r the adoption of monetarism and supply-side economics was provided by a neo-conservative ideology which is often referred to as the "New Right". Conservatism as a philosophy predates l i b e r a l i s m and the conservative period of history was marked by the a u t h o r i t a r i a n i s m of the s t a t e , a c o n c e p t o f t h e ' n a t u r a l o r d e r ' o f t h i n g s , mercantilism, and a d i s t i n c t and r e l a t i v e l y i n f l e x i b l e class s t r u c t u r e . This was the period when the philosophy of the pre-eminence of the i n d i v i d u a l ( c l a s s i c a l l i b e r a l i s m ) had not yet emerged. However, as Resnick (1984; p. 6) points out, " i n one of those i n t e r e s t i n g i d e o l o g i c a l r e v e r s e s , neo-conservatism has come to i d e n t i f y i t s e l f with the values of ind i v i d u a l i s m and l i b e r t y which are anything but conservative i n o r i g i n " . The neo-conservative ideology r e f l e c t s c l a s s i c l i b e r a l i s m , o r what was i d e n t i f i e d e a r l i e r as "rugged i n d i v i d u a l i s m " . Both c l a s s i c l i b e r a l i s m and neo-conservatism r e p u d i a t e the c o l l e c t i v e ( R e s n i c k , 1984), propound the primacy of the i n d i v i d u a l , and uphold a free market system unhampered by any interference from the state. 44 The neo-conservative p o l i t i c i a n s have been e l e c t e d (in Great B r i t i a n , United States and Canada) by a segment of the population who have become disenchanted with huge governments which were seemingly i n e f f e c t i v e i n dealing with the c r i t i c a l issues of i n f l a t i o n and unemployment. Although p o l i t i c i a n s i n , for example, the United States and British Columbia, were e l e c t e d on the basis of a general d i s s a t i s f a c t i o n with the p r e v a i l i n g economic s i t u a t i o n , governments were not given a s p e c i f i c mandate to slash s o c i a l s e c u r i t y expenditures or soc i a l services. However, once elected, such Administrations could tap i n t o an underlying d i s s a t i s f a c t i o n with c e r t a i n  aspe c t s of the w e l f a r e s y s tem, and meet w i t h m i n i m a l r e s i s t a n c e when reducing expenditures f o r c e r t a i n programs (Piven and Cloward, 1982). For example, Taylor-Gooby and Dale (198 5) point out that the Thatcher Administration in the United Kingdom, has enacted p o l i c i e s which have in c r e a s e d unemployment levels and, at the same time, cut programs upon which the unemployed depend. Yet e l e c t i o n r e s u l t s have shown th a t such p o l i c i e s "may a c t u a l l y generate e n t h u s i a s t i c support" (Taylor-Gooby. 1985; p. 1). Closer to home, the B r i t i s h Columbia S o c i a l C r e d i t government was r e c e n t l y r e -e l e c t e d i n spite of i t s previous unprecedented assault on the s o c i a l welfare system. The P o s t - C r i s i s Period The continuing discussion of the ' c r i s i s ' of the welfare sta t e has hinged around the dichotomy between, on the one 45 hand, those supporting welfare i d e a l s , and, on the other, the neo-conservatives. "On the one hand stands the o l d w e l f a r e s t a t e , w i t h i t s commitment to u n i v e r s a l and comprehensive s o c i a l programs and to s o c i a l r i g h t s g e n e r a l l y ... and on the other, stands i t s arch enemy neo-conservatism, w i t h i t s d o c t r i n e of monetarism and the g o s p e l of f r e e market, h e l l bent on demolishing the s o c i a l welfare system" (Mishra, 1986; p. 1). What emerges is an " a l l or nothing" view of the future of the welfare s t a t e . Mishra (1986) suggests that, i n the face of economic problems, the broad range of a v a i l a b l e p o l i c y options are overlooked. Mishra also suggests that, although those on the r i g h t may wish to adopt a p o l i c y of d i s m a n t l i n g the w e l f a r e system by a b o l i s h i n g programs, t i g h t e n i n g up program e l i g i b i l i t y , withdrawing or r e s t r i c t i n g funding and reducing the public s e c t o r , s u c c e s s f u l implementation of the p o l i c y w i t h i n the democratic system i s another matter. For example, the s u s c e p t a b i l i t y of the p o l i t i c i a n t o p u b l i c o p i n i o n was evidenced i n 1985, when Prime M i n i s t e r Mulroney proposed a de-indexing of the 'old age' pension r a t e s . The ensuing backlash from voters was s u c c e s s f u l i n convincing him to rec o n s i d e r his de c i s i o n to take such a c t i o n . In f a c t , Therborn and Roebroeck (1986; p. 1) argue t h a t , "as l o n g as d e m o c r a c y p r e v a i l s ... the w e l f a r e s t a t e i s an i r r e v e r s i b l e major i n s t i t u t i o n of a d v a n c e d c a p i t a l i s t 46 c o u n t r i e s " . Data, compiled to support t h e i r argument, show that "although the average ye a r l y growth of s o c i a l s e c u r i t y expenditure d e c l i n e d i n almost a l l Western count r i e s under review between 1975 and 1981 (16 countries were surveyed), s o c i a l s e c u r i t y e x p e n d i t u r e s c o n t i n u e d to grow at a respectable rate" (Therborn and Roebroeck, 198 6; p. 327). An examination of the data from the neo-conservative Thatcher and Reagan Adm i n i s t r a t i o n s a f t e r 1981, i n d i c a t e s t h a t under Thatcher, public expenditures on s o c i a l s e c u r i t y and personal b e n e f i t s grew from 26.336 mil l i o n pounds i n the f i s c a l year 1978/79 to 28.444 m i l l i o n pounds i n the f i s c a l y e ar 1982/83. Between 1980 and 1983, the Reagan Ad m i n i s t r a t i o n i n c r e a s e d s o c i a l s e c u r i t y programs, which provide e l d e r l y , d i s a b i l i t y and s u r v i v o r s ' b e n e f i t s , by 15 p e r c e n t ( i n r e a l t e r m s ) . However, t h i s A d m i n i s t r a t i o n did slash some means-tested programs. Therborn and Roebroeck (1986) do not deny that, in sp i t e of these increases, Western count r i e s are, f o r the most part, t a k i n g the same measures; namely, (i) de-indexing; ( i i ) i m p l e m e n t i n g more s t r i n g e n t e n t i t l e m e n t s to income supplement programs; ( i i i ) s h i f t i n g towards p r i v a t i z a t i o n ; and, (iv) s h i f t i n g r e s p o n s i b i l i t y f o r s o c i a l welfare from the state to the family. However, they suggest that, so long as the democratic framework e x i s t s , there are f a r too many people r e c e i v i n g b e n e f i t s f o r a major dismantling of the welfare s t a t e to occur. Despite the r e s t r u c t u r i n g that appears to be o c c u r r i n g , the 'welfare s t a t e 1 w i l l endure. 47 Indeed, Therborn and Roebroeck (1986) argue t h a t c e r t a i n socio-economic v a r i a b l e s w i l l p ropel expansion of the welfare s t a t e i n c e r t a i n areas. F o r example, as the population ages, there w i l l be increased demands for health care. Even i f the cr e a t i o n of the economic conditions necessary to a t t a i n f u l l employment becomes le s s l i k e l y , there w i l l be incre a s e d pressure to implement programs (other than those of an income assistance nature), i n order to deal with the problem. These authors f u r t h e r suggest that, i n some countries, the need to stimulate a move away from zero population growth w i l l create increased pressure f o r a d d i t i o n a l s o c i a l welfare programs. At the same time, p o l i t i c a l support w i l l come from those i n the 'aging' population, the unemployed, and others a f f e c t e d by various socio-economic v a r i a b l e s . I t is on the basis of this evidence and argumentation that the authors contend that the current debates on the ' c r i s i s ' of the welfare sta t e are an " i d e o l o g i c a l f a d " which cannot be taken s e r i o u s l y . The Post-Welfare State While the welfare state in Canada may have been 'downsized' through the implementation of various s t r a t e g i e s (e.g. the p r i v a t i z a t i o n of c e r t a i n s o c i a l s e r v i c e s ) , i t has not been 'dismantled' to the extent which was, perhaps, envisioned by the neo-conservatives and apprehensive s o c i a l workers. The w e l f a r e s t a t e was the p r o d u c t of both i d e o l o g i c a l and 48 economic developments which occurred on a grand s c a l e . I t cannot be immediately transformed or completely discarded since, while economic circumstances may change r e l a t i v e l y r a p i d l y , i d e o l o g y i s n o t as s u s c e p t a b l e t o r a p i d t ransformation. Rather, there is a slow e v o l u t i o n of thought and b e l i e f t h a t c a r r i e s the threads of o l d ideas i n t o the f u t u r e . An e s t a b l i s h e d i d e o l o g y , and i t s m a t e r i a l consequences (e.g. the welfare s t a t e ) , cannot be discarded a b r u p t l y u n l e s s they can be s i m u l t a n e o u s l y r e p l a c e d by s o m e t h i n g e q u a l l y , or more, a p p e a l i n g and e f f e c t i v e . Although the ' s o c i a l s a f e t y net' may be torn i n places, i t cannot be completely u n r a v e l l e d from beneath a country's p o p u l a t i o n of c i t i z e n s i f e c o n o m i c , p o l i t i c a l and s o c i a l s t a b i l i t y are to be maintained. Whether the welfare s t a t e represents a minor triumph i n the struggle f o r human r i g h t s f o r the majority of i n d i v i d u a l s , or whether the welfare s t a t e serves p r i m a r i l y the needs of the c a p i t a l i s t c lass, w i l l not be argued here. The system i s f a r from b e i n g a d e q u a t e , b o t h i n the l e v e l of s e r v i c e s i t provides and the methods u t i l i z e d to d e l i v e r such programs. However, through developing the welfare component of the s t a t e , policy-makers seemed to be accepting the notion (at l e a s t i m p l i c i t l y ) , t h a t the s t a t e had an o b l i g a t i o n to provide f o r those i n d i v i d u a l s who were unable to provide f o r themselves i n the market place, or who were v i c t i m s of the 'boom-bust 1 c y c l e s of c a p i t a l i s m . 49 When Keynesian economic p o l i c i e s were abandoned i n 1975, because policy-makers considered them inadequate to combat the high l e v e l s of unemployment and i n f l a t i o n which stemmed from the g l o b a l r e c e s s i o n , they were r e p l a c e d by monetarist p o l i c i e s . The policy-makers a n t i c i p a t e d a d i f f e r e n t r o l e f o r the st a t e v i s - a - v i s s o c i a l welfare s e r v i c e s . Responding to advocates of the old c l a s s i c a l l i b e r a l ideology and l a i s s e z -f a i r e market system, t h e y began s u g g e s t i n g t h a t non-p r o d u c t i v e s o c i a l s e r v i c e s c o u l d no l o n g e r be a f f o r d e d ( C a l v e r t , 1984). The p o l i c y - m a k e r s "argued t h a t these s e r v i c e s absorbed too much of the nation's resources - both human and m a t e r i a l - and placed an excessive tax burden on the 'productive' p r i v a t e s e c t o r " ( C a l v e r t , 1984; p. 11). At the same t i m e , m o n e t a r i s t s c a l l e d f o r the c h u r c h , t he community and the fam i l y to move to provide various s e r v i c e s which had been dismantled. If, as some individuals argue, the welfare state may be shown to be "bankrupt i n terms of ( i t s ) l i m i t a t i o n s and degradation of human d i g n i t y and p o t e n t i a l " (Wineman, 1984; p. 25), a br i e f h i s t o r i c a l review has provided some evidence t h a t , p r i o r to the emergence of the welfare s t a t e , s o c i e t y was g e n e r a l l y e q u a l l y ' b a n k r u p t ' s i n c e t h e m a j o r i t y of i n d i v i d u a l s were denied s o c i a l , p o l i t i c a l and c i v i l r i g h t s . C l e a r l y , basic problems such as poverty, were not e r a d i c a t e d 50 with the emergence and expansion of the welfare component of the s t a t e . However, from the perspective of developing adequate l e v e l s of s o c i a l welfare s e r v i c e s i n a p o s t - i n d u s t r i a l s o c i e t y , an important question must be posed. Has the recent adoption of monetarist economic policies and the accompanying ideological s h i f t to neo-conservatism served only to expose the f r a i l t y and inadequacy of a welfare system t h a t was more a concrete and l o g i c a l extension of an economic model, than a system b u i l t on a consensus regarding the necessity f o r guaranteeing t h a t c e r t a i n basic s o c i a l economic and p o l i t i c a l r i g h t s be maintained? I t would appear t h a t the answer is yes. While the voting power of the middle-class may be the major reason why social welfare programs or payments to th i s group w i l l , perhaps, remain i n t a c t , those groups with less ' p o l i t i c a l ' power, such as the low-income or disadvantaged, may see t h e i r e x i s t i n g b e n e f i t s eroded. In f a c t , whenever i t appears p o l i t i c a l l y expedient, i t is conceivable t h a t the s o c i a l welfare b i l l w i l l be i n c r e a s e d f u r t h e r by expanding b e n e f i t s to those classes which are more powe r f u l at the p o l l s , while low income or p o l i t i c a l l y i n s i g n i f i c a n t groups r e c e i v e l e s s , and sink even f u r t h e r below the poverty l i n e . In 1983 and again i n 1986, the B r i t i s h Columbia government 51 introduced r e s t r a i n t budgets which were purportedly aimed at combatting the on-going recession. They proposed to implement such r e s t r a i n t measures as: downsizing government, wage reductions, d e - r e g u l a t i o n , employment through mega-projects, con c e n t r a t i n g power i n V i c t o r i a , downgrading education and s o c i a l programs, and p r i v a t i z a t i o n of both s o c i a l welfare and other types of s e r v i c e s ( A l l e n and Rosenbluth, 1986). For t h o s e i n v o l v e d i n s o c i a l s e r v i c e i d e l i v e r y t h e ' r e -p r i v a t i z a t i o n ' of such s o c i a l s e r v i c e s as r e h a b i l i t a t i o n programs f o r j u v e n i l e s , and adult and youth care f a c i l i t i e s , coupled with a "reduction, weakening or elimination of a wide range of s e r v i c e s b e n e f i t t i n g mainly those with low incomes" ( A l l e n and Rosenbluth, 1986; p. 126), was viewed not only as a d i r e c t a t t a c k on the s o c i a l welfare component of the state but also suggested t h a t such p o l i c i e s would r e c r e a t e the s i t u a t i o n t h a t e x i s t e d before the advent of the welfare s t a t e . In a d d i t i o n , the government s u g g e s t e d t h a t n o n - p r o f i t , voluntary groups, r e l i g i o u s o r g a n i z a t i o n s and the family would move to provide the various s e r v i c e s which had been erased. According to the p o l i t i c a l pundits, i f these groups f a i l e d to provide the s e r v i c e s , i t was evidence t h a t the ser v i c e s had not been r e a l l y necessary. However, at the same time, the government s i g n i f i c a n t l y reduced or eliminated grants to various non-profit community groups which may have 52 been s u c c e s s f u l l y mobilized to provide increased l e v e l s of s e r v i c e s . We t u r n now to a d i s c u s s i o n of p r i v a t i z a t i o n and the a l t e r n a t i v e s a v a i l a b l e t o n o n - p r o f i t groups w h i c h have experienced budget reduc t i o n s i n the face of r i s i n g demands f o r s e r v i c e . 53 NOTES 1: When i t was f i r s t published i n 1962, Kuhn's book, The S t r u c t u r e of S c i e n t i f i c R e v o l u t i o n s , c r e a t e d a r e v o l u t i o n w i t h i n the p h i l o s o p h y of s c i e n c e and, subsequently, i t sparked a great d e a l of debate. Kuhn challenged the l o g i c a l e m p i r i c i s t view of science as an a c c u m u l a t i o n of knowledge or f a c t s w h i ch u l t i m a t e l y r e v e a l e d the t r u t h . He argued t h a t each s c i e n t i s t i s s o c i a l i z e d i n t o , and works w i t h i n , a particular paradigm which prescribes the conceptions of the nature of the theory to be used to guide research, the types of problems to be i n v e s t i g a t e d , appropriate r e s e a r c h m e t h o d s a n d , p e r h a p s , a c c e p t a b l e i n s t r u m e n t a t i o n . Kuhn s u g g e s t e d t h a t w h i l e the accumulation of knowledge plays a r o l e i n the advance of science, the t r u l y major or landmark changes come about as a r e s u l t of r e v o l u t i o n s . H i s model of s c i e n t i f i c e v o l u t i o n may be s i m p l y r e p r e s e n t e d as f o l l o w s : PARADIGM I -> NORMAL SCIENCE -> ANOMALIES -> CRISIS -> REVOLUTION -> PARADIGM II During the period of 'normal' science, the s c i e n t i s t s e a r c h e s f o r f a c t s to match the t h e o r y w h i c h i s c u r r e n t l y embraced w i t h i n the paradigm. However, anomalies may begin to appear, continue to crop up, and a c c u m u l a t e to a p o i n t at w h i c h they c a n n o t be o v e r l o o k e d . The p e r i o d o f c r i s i s b e g i n s when s c i e n t i s t s , f a c e d w i t h the need to e x p l a i n the anomalies, begin to reco n s i d e r the paradigm i t s e l f . R e volutions occur when the period of normal science i s disrupted by the process of d i s c a r d i n g one paradigm f o r another. Once the paradigm has gained ascendancy, ways are sought to expand the i n t e l l e c t u a l ' t e r r i t o r y ' of the paradigm (Kuhn, 1962). A l t h o u g h Kuhn a p p l i e d his a n a l y s i s to the n a t u r a l sciences, many psychologists, s o c i o l o g i s t s and other t h e o r i s t s began examining t h e i r d i s c i p l i n e s from the Kuhnian pe r s p e c t i v e , looking f o r both paradigms and r e v o l u t i o n s . They asked questions such as: is our d i s c i p l i n e a science; how is our knowledge developed and what is i t worth; are we i n a pre-paradigmatic or paradigmatic state; and what are our paradigms? 54 Kuhn argues that, as a r e s u l t of the existence of a dominant paradigm, the s c i e n t i s t i s able to accept b a s i c a s s u m p t i o n s of h i s f i e l d w i t h o u t q u e s t i o n . Although Kuhn t a l k e d only about s c i e n t i f i c paradigms, i t is possible to apply the concept of paradigms to ideology in a limited way. For example, i f one accepts some p a r t i c u l a r p r e v a i l i n g ideology as his or her own, such as the d e s i r a b i l i t y and n e c e s s i t y f o r the continued growth of the welfare s t a t e , i t may be that t h e p e r s o n i s ' b l i n d 1 t o t h e l i m i t a t i o n s and c o n t r a d i c t i o n s t h a t are inherent i n such a system. 55 Chapter I I I PRIVATIZATION At the f e d e r a l l e v e l , monetarism was adopted as the o f f i c i a l economic p o l i c y in 1975 (Wolfe 1984) and, as ea r l y as 1978, there were signs that the p r o v i n c i a l government of B r i t i s h Columbia was f o l l o w i n g the lead already set by policy-m akers at the f e d e r a l l e v e l . However, the budget brought down in 1983 by the S o c i a l C r e d i t government a r t i c u l a t e d a plan f o r " r e s t r a i n t and re c o v e r y " which was c l e a r l y based on c e r t a i n monetarist p r i n c i p l e s . One of the primary r e s t r a i n t measures prescribed by the 1983 budget was ' p r i v a t i z a t i o n ' . This was described as the means by which to e f f e c t l e s s government and lower expenditures ( A l l e n and R o s e n b l u t h , 198 6 ). As a r e s t r a i n t measure, p r i v a t i z a t i o n was considered to be a highly e f f e c t i v e method of r e a l i z i n g the o v e r a l l broad o b j e c t i v e s of the government, which were t o : (i) reduce the cost of goverment se r v i c e s ; (ii) reduce the size of the public sector employee complement by 25 p e r c e n t ; and ( i i i ) i n c r e a s e the e f f e c t i v e n e s s and e f f i c i e n c y of programs by exposing them to the competitive marketplace (Harrison and Gosse, 1986). Very o f t e n , discussions regarding p r i v a t i z a t i o n are muddied by the f a c t that the concept of p r i v a t i z a t i o n i s l i n k e d to the current r e s t r a i n t measures being undertaken at both the 56 p r o v i n c i a l and f e d e r a l l e v e l s of government. However, i n o r d e r to e v a l u a t e the m e r i t s of p r i v a t i z a t i o n , i t i s important that these two issues not be confused (Perryman, 1984). Various authors ( K o l d e r i e , 1986, Leat, 1986) have discussed the ambiguities that o f t e n surround discussions of p r i v a t i z a t i o n and, i n t h i s regard, Kolderie (198 6) provides a simple, but us e f u l , s e r i e s of d e f i n i t i o n s that c l a r i f y the concept. Government can i n s t i t u t e a c t i o n , the end r e s u l t of which i s to provide f o r i t s c i t i z e n s . On the other hand, the a c t i o n taken may serve to produce the s e r v i c e s the government has decided to provide. When a se r v i c e i s p u b l i c l y provided, the dec i s i o n whether or not to have i t , as w e l l as who should have i t , i s a p o l i t i c a l d e c i s i o n . In a d d i t i o n , the r e c i p i e n t s of the s e r v i c e do not usually have to pay f o r the s e r v i c e d i r e c t l y ; however, the government chooses the producer of the service. Services are privately provided when i n d i v i d u a l s or non-go ve rn m e n t a l o r g a n i z a t i o n s make the de c i s i o n to o f f e r the s e r v i c e . I f an i n d i v i d u a l wishes to r e c e i v e a p r i v a t e l y provided s e r v i c e , he or she w i l l both personally choose, and pay, the producer ( K o l d e r i e , 1986). There are, of course, many v a r i a t i o n s in the way a service may be provided to, used by, and paid f o r by consumers. S e r v i c e s may be p r o v i d e d to some or a l l i n d i v i d u a l s , 57 f i n a n c i n g costs may be wholly or p a r t l y borne by government, or the service may be produced by the government or by p r i v a t e o r g a n i z a t i o n s . The government may a l s o p r o v i d e r e g u l a t i o n s which are designed to guarantee, f o r example, minimum environmental health and s a f e t y standards. Although the government may not assume the r e s p o n s i b i l i t y f o r undertakng the day-to day tasks necessary to maintain the standards, government personnel may play a ' p o l i c i n g ' r o l e . The essence of government l i e s i n the p r o v i s i o n f u n c t i o n and i f the p r o v i s i o n f u n c t i o n i s p r i v a t i z e d , "government would s i m p l y withdraw from (or r e d u c e ) i t s r o l e as buyer, r e g u l a t o r , standard s e t t e r , or d e c i s i o n maker" ( K o l d e r i e , 1986; p. 288). In other words, the government abdicates any s t r o n g p o l i c y r o l e r e g a r d i n g what i t w i l l p r o v i d e i t s c i t i z e n s . The p r i v a t i z a t i o n of the p r o v i s i o n f u n c t i o n can occur i n s e v e r a l ways. For example, the government may withdraw from the p r o v i s i o n of a s e r v i c e and t r a n s f e r the r e s p o n s i b i l i t y f o r i t onto the p r i v a t e sector. I t may also begin charging fees f o r s e r v i c e s i t had previously provided f r e e , while continuing to produce the s e r v i c e (e.g. health c l i n i c s s t a f f e d with government personnel and charging user f e e s ) . S u r p r i s i n g l y , support f o r the p r i v a t i z a t i o n of the p r o v i s i o n of s e r v i c e s has come from disparate p o l i t i c a l c i r c l e s . On the one hand, the monetarists claim that present governments 58 have become so large t h a t they are unwieldy, and t h e r e f o r e , must be 'downsized'. The p r o v i s i o n of c e r t a i n s e r v i c e s , e s p e c i a l l y those of a s o c i a l s e r v i c e nature, place too great a demand on the state which, because of increased t a x a t i o n , n e g a t i v e l y a f f e c t s the p r o d u c t i v e p r i v a t e m a r k e t p l a c e . Analysts such as Milton Friedman suggest that p a t e r n a l i s t i c welfare programs weaken the family s t r u c t u r e , reduce the incentive to work, save and innovate, reduce the accumulation of c a p i t a l , and l i m i t i n d i v i d u a l freedom ( F r i e d m a n and Friedman, 1980). At the same time, those who may be described as p o l i t i c a l l y more ' l e f t l e aning' suggest t h a t the 'welfare s t a t e ' has evolved p a r t i a l l y as a consequence of the d e s t r u c t i o n of communities (Wineman, 1984). They maintain t h a t many programs have worked to enhance and enlarge b u r e a u c r a t i c s t r u c t u r e s , r a t h e r then promote and enhance the health and welfare of i n d i v i d u a l s . The extension of law and r e g u l a t i o n are p e r c e i v e d to be r o b b i n g i n d i v i d u a l s , f a m i l i e s and communities of the right "to care for themselves and for each other in ways that private communites always have" (Kolderie, 1986; p. 289). The production of a s e r v i c e i s merely that; producing those goods, s e r v i c e s , equipment, f a c i l i t i e s or labour t h a t are p r e s c r i b e d by government p o l i c y . P r o d u c t i o n may be 59 p r i v a t i z e d i n a v a r i e t y of ways. For example, the p r o v i n c i a l government recently announced that i t was open to privatizing any or a l l of i t s Crown Corporations; that i s , they were a l l 'for sale'. In t h i s context, p r i v a t i z a t i o n i s the s e l l i n g o f f of companies th a t were previously p u b l i c l y owned, and which produced those goods and services which the government had decided to provide. The p u b l i c l y owned company may be sold to a single buyer, or a consortium, or shares i n the company may be placed on the market f o r sale to the public. In the event that those Crown Corporations which produce e s s e n t i a l goods or s e r v i c e s are placed i n p r i v a t e hands, the government may choose to p r o t e c t the public from future e x p l o i t a t i o n by i n t r o d u c i n g r e g u l a t o r y mechanisms. The government may choose to forego producing any of the goods and s e r v i c e s i t has decided to provide by c o n t r a c t i n g -out with p r i v a t e producers. Generally, the debate around p r i v a t i z i n g the production of s e r v i c e s hinges around cost e f f e c t i v e n e s s , e f f i c i e n c y , the v a l u e of c o m p e t i t i o n , 'creaming', and the p o t e n t i a l f o r c o r r u p t i o n . Proponents f o r c o n t r a c t i n g - o u t s e r v i c e s argue t h a t p r i v a t e l y managed companies are more e f f i c i e n t l y managed and this, coupled with competition, serves to keep organizations cost e f f e c t i v e . On the other hand, p r i v a t i z a t i o n of the production of s e r v i c e s i s said to r e s u l t i n 'creaming', wherein, only when i t i s p r o f i t a b l e to produce c e r t a i n goods or s e r v i c e s w i l l they r e c e i v e t h e a t t e n t i o n of t h e p r i v a t e m a r k e t . Any 60 'unprofitable' e n t e r p r i s e s w i l l be neglected. The c o n t r a c t i n g - o u t f o r the p r o v i s i o n of s o c i a l w e l f a r e s e r v i c e s , e i t h e r from n o n - p r o f i t or f o r - p r o f i t agencies or org a n i z a t i o n s , i s not a new development i n the history of s o c i a l s e r v i c e d e l i v e r y . Once a g a i n , E n g l i s h h i s t o r y provides an example. Although workhouses, poor-houses and almshouses had been prevalent long before the eighteenth century, the Law of 1722 autho r i z e d overseers and church wardens to e s t a b l i s h workhouses. These i n s t i t u t i o n s were to be the sole source of poverty r e l i e f . Any i n d i v i d u a l who refused to enter the workhouse was, of course, denied any form of assistance. What was unique about t h i s development was th a t the operation and maintenance of these workhouses were to be contracted-out by tender to p r i v a t e i n d i v i d u a l s . The c o n t r a c t o r would be paid f o r providing the s e r v i c e s i n any one of s e v e r a l ways t h a t are f a m i l i a r to those i n d i v i d u a l s i n v o l v e d i n s o c i a l s e r v i c e d e l i v e r y today. He or she may have been paid on a per person basis, been given a f l a t sum with which to operate the house, or given a sum of money to maintain a l l the poor i n the parish (de Sch w e i n i t z , 1943; p. 58). Of course, whatever the arrangement, i t was to the contractor's advantage to keep costs down. Consequently, i n the absence of r e g u l a t i o n , the c o n t r a c t o r was free to 'economize' on food or other e s s e n t i a l s . As a r e s u l t , the 61 conditions w i t h i n the workhouse were o f t e n unsavory and del e t e r i o u s . Apparently, i t was even standard p r a c t i c e f o r the operator of the workhouse to pay some poor folk a small amount of money not to enter the workhouse (de Sc h w e i n i t z , 1943). Contracting-out i s not only rooted i n h i s t o r y , i t has long been a p r e v a l e n t p r a c t i c e i n p r o v i n c e s such as B r i t i s h Columbia. In the past, many l a r g e , w e l l known, n o n - p r o f i t o r g a n i z a t i o n s have provided the government with various s o c i a l s e r v i c e s . However, what i s new to B r i t i s h Columbia, and other provinces, is the advent of f o r - p r o f i t companies prepared to d e l i v e r s o c i a l welfare s e r v i c e s . In a d d i t i o n , although c o n t r a c t i n g - o u t i s not a new development, r e c e n t l y the government has appeared to be s h i f t i n g the r e s p o n s i b i l i t y f o r both the provision and production of s o c i a l s e r v i c e s from the public to the p r i v a t e s e c t o r by severely c u t t i n g back or el i m i n a t i n g grants, or c a n c e l l i n g c o n t r a c t s to a wide v a r i e t y of s o c i a l welfare agencies (B.C.G.E.U., 1985). Models of P r i v a t i z a t i o n Because the term ' p r i v a t i z a t i o n ' i s oft e n used ambiguously, i t i s u s e f u l to discuss possible models of p r i v a t i z a t i o n , or the way the concept may be employed i n p r a c t i c e . U t i l i z i n g the concepts of provi s i o n and production, i t i s possible to cons t r u c t the f o l l o w i n g model. 62 Production 2 Government Government produces produces no social some social Provision 1 services services Government produces the complete range of services necessary to maintain acceptable social and economic standards of l i v i n g for a l l Government provides A* no social services Government provides some social B C D services Government provides the complete range of services necessary to maintain E F G acceptable social and economic standards of li v i n g for a l l * Abandonment rather than privatization. •'•Provision: The government assumes responsibility for the maintenance of the health and welfare of citizens (mechanism - social policies). "Production: The goods and services are produced by government; i.e., government employees working in government offices produce goods or services. 63 As the model demonstrates, there are a v a r i e t y of ways i n which p r i v a t i z a t i o n can be implemented. For example, as indicated in Cell A, the government may formulate a policy to provide no s o c i a l s e r v i c e s and, at the same time, produce none. Churches and c h a r i t i e s step i n to provide poor r e l i e f . A c t i o n of t h i s nature may be more a c c u r a t e l y described as abandonment, r a t h e r than p r i v a t i z a t i o n . As i n d i c a t e d i n C e l l D, the p o l i c y may be to provide some s o c i a l s e r v i c e s and produce a complete range of services. Government offices and employees producing the se r v i c e s might be subsidized by user fees or through increased t a x a t i o n . I t i s also possible f o r the government to provide f o r a f u l l range of se r v i c e s and e i t h e r produce some or a l l of the se r v i c e s ( C e l l s F and G). On the other hand, a l l s e r v i c e s may be contracted-out and p r o d u c e d o r s u p p l i e d by n o n - p r o f i t o r f o r - p r o f i t o r g a n i z a t i o n s ( C e l l E). Agencies Involved i n the Pr o v i s i o n and Production of S o c i a l  Services Since the advent of the welfare s t a t e , both government agencies and the various types of n o n - p r o f i t and voluntary s o c i e t i e s have played an i n t e g r a l part i n the pro v i s i o n and d e l i v e r y of s o c i a l s e r v i c e s (Weddell, 1986). In 1966, the Canada A s s i s t a n c e P l a n , i m p l e m e n t e d by the f e d e r a l government, provided f o r , among other things, " f e d e r a l sharing of costs of a c t i v i t i e s and programs which f o s t e r the participation of consumers of welfare services" (Guest, 1985: 64 p. 159). This plan provided the monetary impetus f o r the p r o v i n c i a l governments to employ n o n - p r o f i t agencies to d e l i v e r y a n c i l l i a r y s e r v i c e s , the c o s t s of which would s u b s e q u e n t l y be c o s t - s h a r e d by the f e d e r a l government. Although Guest (1985) points out that most of the welfare r i g h t s groups, which sprang up i n the 1960's, developed without the be n e f i t of government assistance, i t i s safe to say t h a t many n o n - p r o f i t s o c i e t i e s took advantage of t h i s funding opportunity. Funding mechanisms have in c l u d e d f e e - f o r - s e r v i c e c o n t r a c t s , purchase-of-service agreements, core funding arrangements or program grants (Langford, 1983). On the other hand, some no n - p r o f i t s o c i e t i e s have r e l i e d on corporate and p r i v a t e donations, the e n t r e p r e n e u r i a l e f f o r t s of volunteers and s t a f f , or f i n a n c i a l support from such f u n d - r a i s i n g agencies as the U n i t e d Way, to p r o v i d e v a l u a b l e s o c i a l s e r v i c e s without the assistance of government funds. Beck (1970) suggested t h a t i n order to discuss and evaluate the performance of the priva t e n o n - p r o f i t s e c t o r within the s o c i a l s e r v i c e f i e l d , i t was n e c e s s a r y to d e l i n e a t e the q u a l i t i e s and o r g a n i z a t i o n a l s t r u c t u r e s of the a g e n c i e s i n v o l v e d . Beck sets out a t r i - p a r t i t e typology of p r i v a t e agencies t h a t have played key r o l e s i n the d e l i v e r y of public s e r v i c e s i n the United States but which i s also r e l e v a n t to 65 an analysis of the p r i v a t e n o n - p r o f i t s e c t o r i n Canada. The f i r s t type, Beck contends, i s the quasi-non-govern mental agency. Although i n c o r p o r a t e d as a no n - p r o f i t independent s o c i e t y , t h i s type of agency i s " e n t i r e l y or almost e n t i r e l y dependent on government support f o r ( i t s ) e x i s t e n c e " (Beck, 1970: p. 149). The n o n - p r o f i t s o c i e t y i s governed by i t s Charter through a Board of D i r e c t o r s ; however, the agency's dependence on government funds i n f l u e n c e the actions of the governing members, the r o l e s of the s t a f f , and the d e l i v e r y of s e r v i c e s . While these kinds of agencies may have been established completely independent of government, they have become progressively more dependent on government funding. A l t e r n a t i v e l y , many may have been established s o l e l y at the behest of government and with government funds. The second type of o r g a n i z a t i o n i s the " t r u l y voluntary agency c h a r a c t e r i z e d by actions taken by pr i v a t e c i t i z e n s on t h e i r own v o l i t i o n , not f o r p r o f i t , and o u t s i d e the i n i t i a t i v e and a u t h o r i t y of the government" (Beck, 1970: p. 1 4 9 ) . B e c k s u g g e s t s t h a t t h i s t y p e o f a g e n c y i s s i g n i f i c a n t l y d i f f e r e n t from the qu a s i - n o n - g o v e r n m e n t a l agency by v i r t u e of the f a c t that the a s s o c i a t i o n and the i n d i v i d u a l s i n v o l v e d a c t outside the p o l i t i c a l sphere. In other words, thi s type of o r g a n i z a t i o n may serve the "needs of i n d i v i d u a l s " while quasi-non-govern mental agencies "must serve public purposes" (Beck, 1970: p. 150). The Lions Club exem p l i f i e s t h i s p a r t i c u l a r type of o r g a n i z a t i o n . U t i l i z i n g 66 a v a r i e t y of methods, the Lions Club membership raise money wh i c h i s used to f u n d d i r e c t s e r v i c e s by t h e i r own volunteers, is donated to other community groups, or i s used to support public health f a c i l i t i e s ; f o r example, purchasing a kidney d i a l y s i s machine f o r a l o c a l h o s p i t a l . The group members p r o v i d e a v a r i e t y of d i r e c t s e r v i c e s to o t h e r i n d i v i d u a l s or groups, r a n g i n g from t r a n s p o r t a t i o n and reading s e r v i c e s f o r the bl i n d to hosting s p e c i a l events f o r residents of long term care i n s t i t u t i o n s . According to Beck, the t h i r d type of agency i s the non-voluntary or p r i v a t e s e r v i c e agency. A s e l f - p e r p e t u a t i n g Board of Trustees, with no r e s p o n s i b i l i t y to a membership of any kind, governs the act i o n s of a paid p r o f e s s i o n a l s t a f f . "Such or g a n i z a t i o n s are l e g i t i m i z e d i n so c i e t y by the s o c i a l u t i l i t y of t h e i r program r a t h e r than by t h e i r status as the rep r e s e n t a t i v e organs of defined bodies of c i t i z e n r y " (Beck, 1970: p. 150). C u r r e n t l y , Foundations and P h i l a n t h r o p i c Trusts provide examples of t h i s type of agency. F i n a l l y , there is the r e c e n t emergence of the l a r g e - s c a l e p r i v a t e f o r - p r o f i t companies and large corporations i n t o the s o c i a l s e r v i c e a r e n a ( S o c i a l P l a n n i n g C o u n c i l , 1984). A l t h o u g h p r i v a t e companies, t h r o u g h v a r i o u s t y p e s of government contracts, have always played a major role in both building r a i l w a y s , highways and other p u b l i c u t i l i t i e s and, 67 providing d i r e c t s e r v i c e i n areas such as refuse removal, the emergence of large p r i v a t e companies i n the health care and s o c i a l s e r v i c e s f i e l d s i s new and has generated extensive debate. "Advocates of the welfare s t a t e are i n c l i n e d to agree th a t the caring and aiding o b j e c t i v e s of s o c i a l welfare programs are b e t t e r served by public and p r i v a t e n o n - p r o f i t agencies than by profit-making organizations" (Gilbert, 1983: p. 10). In his c r i t i q u e of p r i v a t i z a t i o n , G i l b e r t (1983) r e i t e r a t e s the moral, e m p i r i c a l and t h e o r e t i c a l grounds f o r the basis of the arguments promulgated by advocates of the welfare state. Morally, i t is considered wrong f o r someone to p r o f i t from a d i s a d v a n t a g e d i n d i v i d u a l ' s n e e d f o r v i t a l s e r v i c e s . T r a d i t i o n a l l y , s o c i a l welfare s e r v i c e s , e s p e c i a l l y those t h a t focussed on c h i l d r e n , the e l d e r l y , and the disabled, were performed by the family and " i n s p i r e d by love and the sense of personal commitment th a t bonds fam i l y l i f e " ( G i l b e r t , 1983: p. 10). H i s t o r i c a l l y , t h i s state of a f f a i r s may have been true f o r the wealthy s e c t o r of s o c i e t y . However, i t i s highly l i k e l y t h a t many f a m i l i e s were too poor to provide assistance to other f a m i l y members. Consequently, th i s p a r t i c u l a r aspect of the moral argument appears somewhat questionable. The economic argument l e v i e d against p r i v a t e f o r - p r o f i t companies or corporations is that "competitive markets do not 68 work w e l l " with s o c i a l welfare types of ser v i c e s and t h a t t h e y w i l l be " i n e f f e c t i v e and i n e f f i c i e n t i n the s o c i a l market" ( G i l b e r t , 1983 : p 11). E m p i r i c a l l y , i t i s d i f f i c u l t to show that n o n - p r o f i t agencies provide b e t t e r q u a l i t y s e r v i c e s than f o r - p r o f i t p r i v a t e o r g a n i z a t i o n s . G i l b e r t suggests that, because " s o c i a l welfare programs often serve o b j e c t i v e s t h a t are impalpable and mu l t i p l e " ( G i l b e r t , 1983: p. 11), gathering e m p i r i c a l data to substantiate claims as to the s u p e r i o r i t y of n o n - p r o f i t a g e n c i e s i s d i f f i c u l t . He points out the conundrum i n assessing the success of m a r i t a l c o u n s e l l i n g , planned parenthood or other s i m i l i a r programs, and questions whether the quality of nursing home care should be measured by the " a t t e n t i v e n e s s of s t a f f , g r a c i o u s ambience, or the n i t t y - g r i t t y of how many times a week the sheets are changed" ( G i l b e r t , 1983: p. 11). G i l b e r t suggests that e m p i r i c a l data, with which to make informed decisions as to the e f f e c t i v e n e s s or i n e f f e c t i v e n e s s of both the f o r - p r o f i t p r i v a t e agency and the n o n - p r o f i t a g ency, are l a c k i n g . What i s r e q u i r e d i s a c o m p l e t e comparative an a l y s i s of s i m i l i a r s e r v i c e s provided by both types of agencies. As a r e s u l t of thi s l a c k of substantive i n f o r m a t i o n , arguments i n defense of the n o n - p r o f i t agencies hinge on "speculative t h e o r e t i c a l c o n s i d e r a t i o n s " ( G i l b e r t , 1983: p. 14). 69 One of the major arguments mounted i n defense of the non-p r o f i t agency i s t h a t , because of t h e i r o r g a n i z a t i o n a l s t r u c t u r e and methods of s e r v i c e d e l i v e r y , the n o n - p r o f i t o r g a n i z a t i o n can be more responsive to and, indeed, r e f l e c t the s o c i a l s e r v i c e needs of the p a r t i c u l a r community i n which i t o p e r a t e s . A l t h o u g h the Board of D i r e c t o r s may be c o m p r i s e d of b u s i n e s s and p r o f e s s i o n a l people s e l e c t e d because of t h e i r p o t e n t i a l f o r a t t r a c t i n g or obtaining funds, and while t h e i r " d e f i n i t i o n s of the commonweal" may not be congruent with those of the i n d i v i d u a l s who comprise the community, the g o v e r n i n g s t r u c t u r e and o r g a n i z a t i o n a l f e a t u r e s of the n o n - p r o f i t agency p r o v i d e e f f i c i e n t mechanisms f o r e n s u r i n g t h a t the B o a r d of D i r e c t o r s i s responsive to community needs. G i l b e r t , and other analysts (Guest, 1985) point out t h a t as a r e s u l t of the c i t i z e n p a r t i c i p a t i o n movements which became popular i n the 1960's, i t i s quite common f o r r e p r e s e n t a t i v e s of the c l i e n t group to s i t on governing boards. "This development has strengthened agency a c c o u n t a b i l i t y to both the community at large and the agency's c l i e n t s within the community" ( G i l b e r t , 1983: p. 15). In contrast, i t i s argued th a t the goal of the governing body of the f o r - p r o f i t o r g a n i z a t i o n is to maximize p r o f i t s f o r i t s i n v e s t o r s . The degree to which such an o r g a n i z a t i o n w i l l be sympathetic to community needs is thought to be circumscribed by the bottom l i n e on the p r o f i t and l o s s s t a t e m e n t . 70 However, accountability may be increased by the direct market t r a n s a c t i o n that takes place between the buyer and s e l l e r of services, provided that the consumer purchases the service of the f o r - p r o f i t agency. I f the purchaser of a se r v i c e is not s a t i s f i e d , he or she may not r e t u r n . Both f o r - p r o f i t and n o n - p r o f i t agencies may be rendered les s accountable by v i r t u e of the t h i r d - p a r t y payment s t r u c t u r e . The consumer does not pay for the services and the purchaser does not consume the s e r v i c e . As a r e s u l t , both types of agencies become more accountable to the purchaser of the service than to the consumer. Another argument f o r the d e s i r a b i l i t y of no n - p r o f i t agencies, as opposed to f o r - p r o f i t o r g a n i z a t i o n s , i s th a t the non-p r o f i t society's C o n s t i t u t i o n or Charter (as w e l l as the government r e g u l a t i o n s p e r t a i n i n g to n o n - p r o f i t agencies), p r o h i b i t s p r o f i t e e r i n g . A l t h o u g h s u r p l u s monies can be accrued by n o n - p r o f i t agencies, p r o f i t s cannot be d i s t r i b u t e d to the i n d i v i d u a l members of the o r g a n i z a t i o n . The p r o h i b i t i o n against d i s t r i b u t i o n of p r o f i t s is considered the mechanism f o r preventing abuses i n s p e c i f i c instances where: (i) there are t h i r d - p a r t y payment arrangements; ( i i ) "the complexity and non-standarized c h a r a c t e r of s e r v i c e s such as m a r i t a l c o u n s e l l i n g , c h i l d care, and r e h a b i l i t a t i o n of the p h y s i c a l l y d i s a b l e d make i t d i f f i c u l t f o r consumers to 71 compare and judge t h e i r q u a l i t y and value"; ( i i i ) s e r v i c e s involve c o e r c i o n , (e.g., the care of c h i l d r e n or p s y c h i a t r i c p a t i e n t s ) ; and, ( i v ) because of a l a c k of s e r v i c e s , the consumer has no choice (Gilbert, 1983: p. 16). F i n a l l y , the r e m a i n i n g t h e o r e t i c a l argument f o r the s u p e r i o r i t y of n o n - p r o f i t agencies over t h e i r p r o f i t - m a k i n g counterparts i s t h a t t h e i r " c h a r i t a b l e ethos i s l i k e l y to e x e r c i s e a p o s i t i v e i n f l u e n c e on the q u a l i t y of response to s o c i a l welfare needs" ( G i l b e r t , 1983: p. 17). However, non-p r o f i t agencies are, as indeed they must be, as concerned wi t h maximizing savings and accruing p r o f i t s as are p r o f i t -making or g a n i z a t i o n s . Although constrained from d i s t r i b u t i n g p r o f i t s d i r e c t l y to i n d i v i d u a l members, p r o f i t s may be d i s t r i b u t e d i n d i r e c t l y to s t a f f and members through large s a l a r i e s , extended b e n e f i t s , or honorariums. I t i s naive to s u g g e s t t h a t a l l i n d i v i d u a l s i n v o l v e d i n n o n - p r o f i t o r g a n i z a t i o n s are impelled by a " c h a r i t a b l e ethos" or that there is a common ethical ground. In the f i n a l a n alysis, G i l b e r t suggests that the point i s not to decide which type of agency i s u n i v e r s a l l y superior but, r a t h e r , to a s c e r t a i n the circumstances under which one type of agency would prove to be superior over another. F i r s t , c o n s i d e r a t i o n should be given to the nature of the s e r v i c e . Standardized s e r v i c e s , such as i n n o c u l a t i o n s , x-ray s e r v i c e s , or b l o o d , v i s u a l and a u d i t o r y t e s t s , are amenable to 72 e v a l u a t i o n i n terms of c o s t , e f f i c i e n c y and d e l i v e r y . Therefore, the f o r - p r o f i t agency may provide the op t i m a l v e h i c l e f o r the pr o v i s i o n of such types of se r v i c e s . A second c o n s i d e r a t i o n is the l e v e l of competence of the c l i e n t seeking s e r v i c e . C h i l d r e n , the mentally handicapped, the m e n t a l l y i l l , and the e l d e r l y i n f i r m are h i g h l y v u l n e r a b l e i n d i v i d u a l s who can be e x p l o i t e d e a s i l y . In a d d i t i o n , these groups o f t e n f i n d t h e m s e l v e s i n care s i t u a t i o n s which have a coercive component. Under such circumstances, i t i s imperative t h a t there be a high degree of public a c c o u n t a b i l i t y i n order to counter the p o t e n t i a l f o r abuses. In f a c t , recent exposes of abuses o c c u r r i n g i n the nursing home industr y have provided an e m p i r i c a l basis f o r the argument against the d e s i r a b i l i t y and e f f i c a c y of p r i v a t e f o r - p r o f i t companies i n the health care f i e l d ( S o c i a l Planning C o u n c i l , 1984). As we have seen, p r i v a t i z a t i o n i s not a re c e n t phenomenon, nor has discussion about i t s r e l a t i v e merits or shortcomings been absent. Weddell (1986) points out tha t "the c l a r i o n c a l l f o r p r i v a t i z i n g public s e c t o r s e r v i c e s i s not new"; over a decade ago, i t was "suggested t h a t the purpose and appropriate role of government i s to make decisions, not do tasks r e q u i r e d " (Weddell, 1986: p. 15). However, i n the early 1980's, the discussions regarding the various forms of 73 p r i v a t i z a t i o n became a raging debate when governments, arguing that they faced severe budgetary problems, embarked upon various r e s t r a i n t measures consistent with a new (and more g l o b a l ) e c o nomic s t r a t e g y ( i . e . , monetarism) and l e g i t i m i z e d by a neo-conservative ideology. P r i v a t i z a t i o n i n B r i t i s h Columbia In 1972, the New Democratic Party was s u c c e s s f u l l y e l e c t e d after promising to implement extensive reforms throughout the B r i t i s h Columbia government (Morley et a l , 1983 ). Although the N.D.P. planned extensive p o l i c y changes ge n e r a l l y , and also w i t h i n c e r t a i n m i n i s t r i e s , some analysts suggest that they had not formulated an o v e r a l l comprehensive plan f o r revamping government a d m i n i s t r a t i o n (Morley et a l . 1983; Clague et a l , 1984 ). The N.D.P. mandate f o r change extended to the province's s o c i a l s e r v i c e system. There was a general consensus among both those i n v o l v e d i n the f i e l d of s o c i a l s e r v i c e s and the consumers of such s e r v i c e s , t h a t the system was inadequate, i n c o n s i s t e n t and fragmented. Although the Party had p o l i c i e s on s p e c i f i c issues such as day care, again, there was "no forma l p o l i c y with respect to r e o r g a n i z a t i o n of s e r v i c e s " w i t h i n the s o c i a l s e r v i c e s s e c t o r (Clague et a l , 1984; p. 30). In the absence of a w e l l formulated, d e t a i l e d o v e r a l l plan, the more general goals of a t t a i n i n g d e c e n t r a l i z a t i o n , i n t e g r a t i o n , and l o c a l a c c o u n t a b i l i t y became the f o c u s 74 (Clague et a l , 1984 ). As the N.D.P. program f o r reform took shape, there evolved p l a n s t o , among o t h e r t h i n g s , "encourage n o n - s t a t u t o r y p r e v e n t a t i v e s e r v i c e s i n non-metropoliton areas through the device of community grants" (Clague et a l , 1984; p. 37). Community resources s o c i e t i e s , which would u l t i m a t e l y be transformed into Community Resources Boards, would administer the grants. A f u l l discussion of the e v o l u t i o n , experience and p o l i c i e s of the Community Resources Boards is provided elsewhere (see Clague et a l , 1984) and this demonstrates that community grants were an extremely important mechanism in the o v e r a l l plan of promoting d e c e n t r a l i z a t i o n and encouraging l o c a l p a r t i c i p a t i o n . They were to provide communities with the resources which would enable them to develop new services designed to meet l o c a l needs. In order to f a c i l i t a t e the use of community grants, t h e i r a d m i n i s t r a t i o n passed from the P r o v i n c i a l Secretary's o f f i c e to the then Department of Human Resources. P r i o r to 1973, grants to communities f o r i n n o v a t i v e , u s e f u l , or possibly e x p erimental non-statutory s o c i a l s e r v i c e s were p r a c t i c a l l y n on-existent (Government of B r i t i s h Columbia, 1974 ). The 1973 Annual Report of the Department of Human Resources c l e a r l y a r t i c u l a t e d the goal of i n v o l v i n g l o c a l communities through increasing the money flowing directly to communities. 75 The grants were extended to a l l c a t e g o r i e s of consumers; namely, f a m i l i e s and c h i l d r e n , " s e r v i c e s f o r e v e r y o n e " , s p e c i a l needs, and seniors. They provided funds f o r a wide and d i v e r s e n e t w o r k of s e r v i c e s s u c h as t r a n s p o r t a t i o n programs f o r both handicapped and seniors, m u l t i - s e r v i c e agencies, Indian f r i e n d s h i p centers, volunteer bureaus, a n t i -poverty programs, fa m i l y and c h i l d support programs, youth programs, and c r i s i s l i n e s . In 1975, the Social Credit Party replaced the N.D.P. and, one year l a t e r , passed l e g i s l a t i o n to dissolve the Vancouver Resource Boards (Clague et a l , 1984). In the Department of Human Resources Annual Reports from 1973 to 1977, the i n t r o d u c t i o n to the Community Grants Section c l e a r l y s t a t e d t h a t the goal of the grant program was "to encourage and support community-operated voluntary s o c i a l programs and services not guaranteed by statute". However, in 1978, three years a f t e r the N.D.P. had been replaced, and long before the r e s t r a i n t budget of 1983, the commentaries i n the Annual Reports r e f l e c t e d a change i n the p o l i c y and a movement toward a more extensive use of p r i v a t i z a t i o n . At that time (1978), a Community Projects Division was formed t o p r o v i d e f o r the i n t e g r a t i o n and c o - o r d i n a t i o n of community-based p r e v e n t a t i v e and r e h a b i l i t a t i v e s o c i a l s e r v i c e s d e l i v e r e d by no n - p r o f i t s and volunteers to s p e c i a l needs groups (Government of B r i t i s h Columbia, 1979). The 76 Ministry of Human Resources Annual Report also stated that "a new policy was developed which emphasized the identification of short-term pro j e c t s and longer term p r o j e c t s , some of which are suitable f o r purchase of s e r v i c e " (p. L61). The f o l l o w i n g table (Table 3:1) i n d i c a t e s c l e a r l y how the community grants mechanism flourished under the N.D.P. reign and how i t has diminished i n the ensuing years. Community grants increased d r a m a t i c a l l y i n 1974-75, but were slashed i n 1976-77. They have been maintained at the same l e v e l to 1984-85, despite i n f l a t i o n . TABLE 3:1 Community Grants F i s c a l Year (Current D o l l a r s ) 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 $ 212,864 737,850 2,871,707 9,313,165 8,092,303 5,856,612 6,129,519 5,919,600 6,335,730 6,614,862 6,628,428 6,786,647 6,004,385 5,195,469 242,678 Source: Government of British Columbia, Ministry (Department) of Human Resources Annual Reports. 77 Although community grants never again reached t h e i r 1975 levels, between 1978 and 1983, there were other developments i n the s o c i a l s e r v i c e f i e l d . MacDonald (1984 ) describes i t as a period "characterized by the expansion and consolidation of s e r v i c e s i n B r i t i s h Columbia, d e l i v e r e d both at the public and p r i v a t e l e v e l s " . For example, a family support program was i n t r o d u c e d to provide counselling programs f o r f a m i l i e s and c h i l d r e n . The goal of the program was to reduce the numbers of c h i l d r e n coming into the care of the M i n i s t r y . E x t e n s i v e and s p e c i a l i z e d c h i l d abuse programs were i n t r o d u c e d , and were f o l l o w e d by the i n s t a l l a t i o n of a province-wide Zenith l i n e a v a i l a b l e f o r the counselling of abused c h i l d r e n and the r e p o r t i n g of c h i l d abuse cases. Following these developments, the government introduced child care workers i n t o schools. Taking d i r e c t i o n from teachers, these c h i l d care counsellors worked with handicapped and 'at r i s k ' c h i l d r e n i n order to f a c i l i t a t e the r e t e n t i o n of the c h i l d r e n i n a r e g u l a r classroom (MacDonald, 1984). Further, as MacDonald points out, the M i n i s t r y was also "taking steps in c o-operation with a s s o c i a t i o n s f o r the mentally r e t a r d e d to f a c i l i t a t e community l i v i n g placements f o r large numbers of young people and adults who had resided f o r years i n government institutions" (MacDonald, 1984; p. 9). However, as badly needed and as valuable as these various 78 programs were, t h e i r implementation was not c o n t r a r y to the a d o p t i o n , by government, of a more g e n e r a l p o l i c y of p r i v a t i z a t i o n . The programs were consistent with a p o l i c y of a v o i d i n g t h e more c o s t l y r o u t e o f c u s t o d y o r i n s t i t u t i o n a l i z a t i o n . The r e l a t i o n s h i p b e t w e e n d e -i n s t i t u t i o n a l i z a t i o n and p r i v a t i z a t i o n , both part of the same economic package, has been documented by various American authors (see Lerman, 1982; S c u l l , 1977; Warren 1981) and there i s every i n d i c a t i o n t h a t the same holds true f o r Canada (Lightman, 1986). M a c D o n a l d s u g g e s t s t h a t t h e r e a r e t h r e e m o d e l s of p r i v a t i z a t i o n and that the development of p r i v a t i z a t i o n i n B r i t i s h Columbia r e f l e c t s aspects of each, r a t h e r than being patterned a f t e r any s p e c i f i c model. F i r s t l y , the extreme concept of p r i v a t i z a t i o n "as applied to s o c i a l s e r v i c e s would seem to imply the a b d i c a t i o n of government r e s p o n s i b i l i t y f o r funding and d e l i v e r y of s e r v i c e s p r e v i o u s l y l o c a t e d i n the p u b l i c s e c t o r , together with a withdrawal of governmental f u n d i n g t o n o n - p r o f i t s o c i e t i e s and p r i v a t e s e r v i c e providers" (MacDonald, 1984; p. 9). Social services would be p r o v i d e d by n o n - p r o f i t a g e n c i e s s u p p o r t e d by v o l u n t a r y c o n t r i b u t i o n s , a n d p r i v a t e f o r - p r o f i t a g e n c i e s and entrepreneurs on the basis of fees. U t i l i z i n g the model of p r i v a t i z a t i o n which was presented e a r l i e r , government a c t i o n of t h i s nature would f a l l i n t o C e l l A. As was suggested, such a development is better described as abandonment rather 79 than p r i v a t i z a t i o n . A c c o r d i n g to MacDonald's second model, the government "continues to assume major funding r e s p o n s i b i l i t y f o r s o c i a l s e r v i c e s while t r a n s f e r r i n g to n o n - p r o f i t o r g a n i z a t i o n s and p r i v a t e service providers s u f f i c i e n t funds to administer and maintain s e r v i c e s at e x i s t i n g l e v e l s " (p. 9). Such government a c t i o n can be seen to correspond to C e l l s B, C, E, and F of the earlier model. The government may provide for some, or a complete range of s o c i a l s e r v i c e s , and plan f o r none, some, or a l l to be produced by government employees The f i n a l model s u g g e s t s t h a t government may assume r e s p o n s i b i l i t y f o r o n l y s t a t u t o r y s e r v i c e s and any p r e v e n t a t i v e or remedial s o c i a l s e r v i c e s are considered to be t h e r e s p o n s i b i l i t y o f v o l u n t a r y n o n - p r o f i t o r e n t r e p r e n e u r i a l f o r - p r o f i t agencies. This development would correspond to C e l l C, which i n d i c a t e s t h a t the government assumes r e s p o n s i b i l i t y or both providing and producing some s o c i a l s e r v i c e s . MacDonald f u r t h e r suggests that, i n view of the cuts made to n o n - p r o f i t agencies during the 1983-84 f i s c a l year, i t would appear th a t the government is r e t r e a t i n g from providing government support to the n o n - p r o f i t s o c i a l sector. He f u r t h e r s t a t e s t h a t "these actions seem designed e i t h e r to 80 e l i m i n a t e c e r t a i n programs or r e - d i r e c t n o n - p r o f i t s o c i e t i e s toward a l t e r n a t i v e non-governmental sources of funding" MacDonald, 1984; p. 13). In other words, and applying the general model set out e a r l i e r , the government i s not only not going to produce s o c i a l s e r v i c e s , i t i s not going to provide them. The Search for Funding in the Face of Government Cutbacks For the non-profit society, alternative funding may come from the corporate sect o r , i n d i v i d u a l donations or through i t s own e n t r e p r e n e u r i a l e f f o r t s . E n t r e p r e n e u r i a l e f f o r t s may i n c l u d e , among o t h e r t h i n g s , c o n d u c t i n g b i n g o , h o s t i n g dances, holding r a f f l e s , s e l l i n g chocolate bars or holding bake sales. While such a c t i v i t i e s usually y i e l d a very low re t u r n f o r the major investment of time t h a t i s requi r e d , the e x t e n t to w h i c h such a c t i v i t i e s c u r r e n t l y f u n d s c h o o l programs, f o r example, has been r e c e n t l y o u t l i n e d (in a newspaper article) (The Vancouver Sun, October 1986). In h i s s u r v e y of B r i t i s h C o lumbia s c h o o l s , Dr. Norman Robinson, a professor at Simon Fraser U n i v e r s i t y , discovered th a t "bingo games, door-to-door chocolate bar sales, r a f f l e s , car washes and other fundraising a c t i v i t i e s are helping fund B.C.'s school system to the tune of about $6 m i l l i o n a year" (The Vancouver Sun, 1986). According to educators, the fund-r a i s i n g a c t i v i t i e s were ne c e s s i t a t e d by the need to o f f s e t r e c e n t M i n i s t r y of Education budget cuts. The revenues 81 generated through f u n d - r a i s i n g were being used f o r such core items as l i b r a r y books, computers and supplementary work books. Although i n the past, many n o n - p r o f i t groups have raised money through the conduct of a c t i v i t i e s such as bingo and r a f f l e s , more r e c e n t l y 'casino nights' have proved to be equally important. Over the past three years, the content of p r e s s r e l e a s e s , a r t i c l e s , and s t o r i e s i n v a r i o u s l o c a l newspapers would seem to i n d i c a t e t h a t a greater number of n o n - p r o f i t groups are u s i n g the p r o c e e d s of gambling a c t i v i t i e s to e i t h e r supplement or t o t a l l y comprise the core f u n d i n g r e q u i r e d t o mount t h e i r v a r i o u s programs. F o r example, when a large new bingo h a l l opened up in Kelowna, 14 c h a r i t i e s leased space. The f a c t t h a t the owner of the h a l l was prepared to hold two bingos a day, seven days a week crea t e d a controversy among n o n - p r o f i t organizations i n the area. Up u n t i l t h i s p a r t i c u l a r bingo parlour opened, the t o t a l amount r a i s e d through bingo operations, by c h a r i t i e s i n Kelowna, was $200,000 annually. I t was prediced that, in the f i r s t y e ar of operations, c h a r i t i e s i n t h i s one h a l l alone would rai s e one m i l l i o n d o l l a r s annually (Vancouver Sun, August 3, 1985). E a r l i e r t h i s y e a r , the i m m e d i a t e p a s t c h a i r m a n of the Canadian N a t i o n a l I n s t i t u t e f o r the B l i n d s t a t e d that, i n 82 1985 and 1986, t h i s o r g a n i z a t i o n had r a i s e d $185,000 and $750,000 r e s p e c t i v e l y , through organized bingo games. On thi s basis, the C.N.I.B. spokesman suggested t h a t perhaps the United Way should consider gambling as means of raising funds for community groups (Vancouver Sun, A p r i l 30, 1987). In l i g h t of t h i s i n f o r m a t i o n , i t would seem tha t the non-p r o f i t s e c t o r i s u t i l i z i n g gaming r e v e n u e s to a g r e a t e r degree than has been the case i n the past. I t may also be the case t h a t ' p r i v a t i z a t i o n ' i s f o r c i n g those n o n - p r o f i t o r g a n i z a t i o n s that provide s o c i a l s e r v i c e s to become i n v o l v e d i n the gaming industry. The questions are, how many such agencies have turned to gaming and what e f f e c t has t h i s had on the agencies? In t h i s regard, a survey of n o n - p r o f i t o r g a n i z a t i o n s was undertaken i n order to a s c e r t a i n whether, at the present time, more s o c i a l s e r v i c e groups are u t i l i z i n g gambling proceeds to fund t h e i r programs than was the case three years ago, and also the e f f e c t t h a t undertaking such a c t i v i t i e s may have had on s t a f f or s e r v i c e d e l i v e r y . However, before proceeding to a review of the findings of the research, a b r i e f discussion of gambling generally, a review of r e c e n t d e v e l o p m e n t s i n B r i t i s h Columbia's gambling industry, and a discussion of how these developments have had an impact upon the n o n - p r o f i t s e c t o r w i l l be provided. 83 Chapter IV GAMBLING In t r o d u c t i o n I f , as a r e s u l t of government r e s t r a i n t measures, the non-p r o f i t s e c t o r has r e c e n t l y more often turned to, or become more dependent on gambling a c t i v i t i e s to provide an alternate source of funding, i t i s important to know something about the phenomenon of gambling i t s e l f . I t i s also necessary to be f a m i l i a r with the s t r u c t u r e and o r g a n i z a t i o n of the gaming ind u s t r y i n order to appr e c i a t e how r e c e n t developments with i n the industry have a f f e c t e d the p a r t i c i p a t i o n of non-p r o f i t s , and th e r e f o r e , the revenue a v a i l a b l e to them from t h i s source. This chapter w i l l provide a b r i e f h i s t o r i c a l overview of gambling, examples of how specific gambling games have been used to r a i s e funds and a d i s c u s s i o n of the development of the gaming industry in British Columbia. An Hist o r i c a l Overview Gambling is rendered a particularly fascinating form of human b e h a v i o u r by i t s u n i v e r s a l i t y and r e c o r d e d p r e s e n c e throughout the history of mankind. Indeed, attempts to deter people from gambling by moral or l e g a l sanctions have been l a r g e l y unsuccessful. C u r r e n t l y , gambling may involve a v a r i e t y of a c t i v i t i e s ; notably, the l o t t e r y , pari-mutuel (or horse race) b e t t i n g , s l o t machines, card games, dice games, wh e e l games, s p o r t s p o o l s , numbers games, and bingo. 84 However, i n the past, many d i f f e r e n t forms of gambling have e x i s t e d . Some w r i t e r s , who have t r a c e d the his t o r y of gambling, argue t h a t the orig i n s of modern gambling l i e i n the r e l i g i o u s r i t u a l s of p r i m i t i v e man ( M a r t i n e z , 1 983; Cohen, 1970, Greenberg, 1980; Garmon, 1966). By throwing dice, cards and l o t s , humans hoped to f o r e t e l l the futu r e by supernatural means. Although these a c t i v i t i e s can be considered to be the e a r l i e s t games of chance, the d i v i n a t i o n was to be c a r r i e d out within a r e l i g i o u s or s p i r i t u a l context. The element of chance was c r u c i a l i n these e a r l y r i t u a l s " i n order to render the r i t u a l a l e g i t i m a t e a c t of d i v i n a t i o n ; w i t h o u t the p o s s i b i l i t y of l o s i n g , w i n n i n g would not make sense" ( M a r t i n e z , 1983; p. 15). The shaman, or p r i e s t , of a community cast l o t s to a s c e r t a i n the w i l l of the gods, the g u i l t or innocence of a suspected c r i m i n a l , and to p r e d i c t the f u t u r e . Although the chance inherent i n the outcome of the throw was t h o u g h t to be under the c o n t r o l of a supernatual power or god, shamans t r i e d to i n f l u e n c e the outcome by chanting or singing (Martinez, 1983). Presently many gamblers continue to invoke r i t u a l s and s u p e r s t i t i o n s i n order to inf l u e n c e 'lady luck'. The e a r l y tools of d i v i n a t i o n were e a s i l y reproduced and by the time the C h r i s t i a n r e l i g i o n was established, gambling was 85 w i d e s p r e a d among the 'common people'. However, the 'commoners' gambled to gain m a t e r i a l resources r a t h e r than f o r "cosmic" reasons (Martinez, 1983; p. 17). Although the C h r i s t i a n church denounced d i v i n a t i o n through l o t s , cards and dice because i t i n v o l v e d a supernatural power or f a l s e god, theologians have pointed out that The Bible does not admonish i n d i v i d u a l s to abstain from gambling. Rather, theologians assert t h a t gambling i s c o n t r a r y to the b i b l i c a l a t t i t u d e s regarding work. According to The B i b l e , man must commit h i m s e l f to honest wages t h r o u g h honest l a b o u r . I t was considered morally wrong to 'get something f o r nothing' and to prosper from idleness (Howington, 196 6). This view s t i l l p r e v a i l s . In the 18th and 19th centuries, stock exchange t r a n s a c t i o n s were considered a form of gambling since many tra n s a c t i o n s were i l l e g a l and p o o r l y r e g u l a t e d . A d d i t i o n a l l y , the insurance industry of today has i t s r o o t s i n gambling. The earliest record of marine insurance is a document dated 1613. T h i s e a r l y i n s u r a n c e was not t a k e n on by ' p r o f e s s i o n a l ' underwriters, but by p r i v a t e i n d i v i d u a l s . The o r i g i n s of the pr e s t i g i o u s insurance company - Lloyd's of London - can be t r a c e d to a group of i n d i v i d u a l s who met at Lloyd's Coffee House and who did not confine themselves to gambling on the safe a r r i v a l of ships. Wagers were placed on such diverse happenings as whose wife would have the f i r s t baby, the l o n g e v i t y of B o n a p a r t e , the outcome of e l e c t i o n s or 86 chessga mes, and (a f a v o r i t e ) the horse races (Ashton, 1898; Sasuly, 1982). Various forms of gambling, then, have been present throughout the history of mankind and both moral and l e g a l attempts to prevent gambling have been unsuccessful. Because of i t s u n i v e r s a l and p e r s i s t e n t nature, gambling has been described as an inherent aspect of the human d i s p o s i t i o n and, perhaps even a necessary part of human and cultural evolution (Cohen, 1970; Ashton, 1898). Further, Cohen (1970) suggests that Man's readiness to t o l e r a t e u n c e r t a i n t y (an inherent featue of a 'gamble') was a s e l e c t i v e f a c t o r i n human e v o l u t i o n . I f t h i s i s indeed the case, and people w i l l always seek out ways i n w h i c h to gamble, any a t t e m p t s to d e t e r or p r o h i b i t gambling a c t i v i t i e s may prove unsuccessful. The Origins of Modern Lotteries A l o t t e r y is a method of d i s t r i b u t i n g e i t h e r goods or p r i z e s among a group of people by l o t or chance. The origins of the popular and widespread modern day lotteries, from which such gambling games as 'bingo', 'keno' and 'numbers' have been derived, can be t r a c e d to ancient times. The Old Testament makes refe r e n c e to kings and leaders being s e l e c t e d , duties being assigned, lands being d i v i d e d up, and property and slaves being given away on the basis of drawn l o t s . In the appropriately named Book of Numbers, we find that the 'Lord' 87 i n s t r u c t e d Moses to take a census of the people of I s r a e l and divide the land among them by l o t : "Notwithstanding the land s h a l l be divided by l o t : according to the names and of the t r i b e s of t h e i r fathers they s h a l l i n h e r i t , According to the l o t s h a l l the possession thereof be divided between many and few." (Numbers, Ch. 26, Verses 55 and 56) Perhaps one of the best known l o t t e r i e s o c curred when Roman guards threw dice f o r Christ's cloak. The f o l l o w i n g passage has been v i v i d l y portrayed i n most of the b i b l i c a l epics: "An when they crucified him, and parted his garments, casting l o t s ; that i t might be f u l f i l l e d which was spoken by the prophet, They parted my garments among them, and upon my vesture did they cast lots." (Matthew 27:35) L o t t e r i e s , i n p a r t i c u l a r , have been a f a v o r i t e form of taxation. Throughout history, governments have attempted to use l o t t e r i e s to rais e money i n order to fund a v a r i e t y of enter p r i s e s . For example, European records r e v e a l t h a t as ear l y as the 15th century, towns held l o t t e r i e s to rais e money to f o r t i f y defences as w e l l as provide f o r the poor. La L o t t o de F i r e n z e , which was held i n Florence i n 1530, i s thought to be the f i r s t public l o t t e r y that o f f e r e d currency as a p r i z e ( S c a r n e , 1974 ). The e n t e r p r i s e p r o v e d so su c c e s s f u l t h a t the p r a c t i c e of holding such l o t t e r i e s spread r a p i d l y throughout I t a l y , as w e l l as to France, Germany, Spain and England (Johnson, 1976). Queen E l i z a b e t h I approved the f i r s t English l o t t e r y i n 1569 fo r "the purpose of r e p a i r i n g harbours" (Johnson, 1976; p. 88 640 ). S u b s e q u e n t l y , b o t h p r i v a t e and p u b l i c l o t t e r i e s p r o l i f e r a t e d i n E n g l a n d u n t i l l o t t e r i e s were f i n a l l y p r o h i b i t e d . In an essay w r i t t e n i n 1771, the anonymous author described the four types of l o t t e r i e s which had been common unti l that time (Unknown Author, 1771). F i r s t , a l o t t e r y may have been set up by an i n d i v i d u a l or S o c i e t y w i t h o u t any a u t h o r i t y from the government. Subscriptions to the l o t t e r y were c o l l e c t e d , d i v i d e d i n t o p r i z e s and disbursed by drawn l o t s or t i c k e t s . The second type of l o t t e r y were those t h a t had been a u t h o r i z e d by a Crown patent or Charter for the purposes of engaging in some pub l i c work or c h a r i t y . However, by the l a t e 18th century, t h i s p a r t i c u l a r t y p e of l o t t e r y had l o s t i t s p o p u l a r i t y . T h i r d , a l o t t e r y could be autho r i z e d by an Act of Parliament f o r the purposes of undertaking c h a r i t a b l e or public works which were independent of government. For example, the proceeds of such a l o t t e r y may have been used to make i n t e r e s t free loans to the poor. S e v e r a l of England's famous landmarks were b u i l t or acquired with the proceeds from thi s kind of l o t t e r y ; f o r example, the Westminster Bridge and the British Museum in London (Johnson, 1976). F i n a l l y , the most common type of l o t t e r y i n 18th century England was the State Lottery. State lotteries differed from those l o t t e r i e s which r e s u l t e d from Acts of Parliament i n 89 t h a t the revenues from s t a t e l o t t e r i e s were to be used f o r the express purposes of the government. King William I I I i n t r o d u c e d s t a t e l o t t e r i e s i n 1694. A p p a r e n t l y , a f t e r implementing customs, e x c i s e , land and p o l l taxes and l e v y i n g taxes on b i r t h s , b u r i a l s , marriages and batchelors, the King turned to l o t t e r i e s i n order to gather f u r t h e r revenue. The conduct and outcome of the 17th and 18th century lottery schemes were r i f e with problems and abuses. Even the s t a t e l o t t e r i e s were no exceptions. For example, once i t was d e c l a r e d that a state l o t t e r y would be held, i n d i v i d u a l s or groups applied to the F i r s t Commissioner of the Treasury f o r t i c k e t s . Sales of t i c k e t s continued throughout the year preceding the draw. However, once buyers r e c e i v e d the t i c k e t s , they of t e n placed them i n the hands of brokers who r e s o l d them. As the draw date of the l o t t e r y approached, t i c k e t s were exchanged q u i c k l y and at i n f l a t e d p r i c e s . In a d d i t i o n , the p r a c t i c e s of r e s e l l i n g t i c k e t s and p l a c i n g side bets or insurance, generated income to which the State had no a c c e s s . Due to a l l e g a t i o n s of abuse and f r a u d , together with the argument that l o t t e r i e s encouraged mass gambling, the l o t t e r i e s were f i n a l l y p r o h i b i t e d i n England i n 1826. Gambling in Canada C u r r e n t l y , the r e g u l a t i o n and l i c e n c i n g of g ambling a c t i v i t i e s f a l l s w i t h i n the p u r v i e w of the i n d i v i d u a l 90 provinces. The present situation evolved as a consequence of s e v e r a l changes made to the C r i m i n a l Code of Canada. In order to understand the l e g a l framework at the f e d e r a l and p r o v i n c i a l l e v e l , i t i s i m p o r t a n t t o u n d e r s t a n d the d e f i n i t i o n of " l o t t e r y scheme" provided i n the Code (Canada Co u n c i l , 1981). The C o n c i s e 0 x f o r d D i c t i o n a r y d e f i n e s a l o t t e r y as "an a r r a n g e m e n t f o r d i s t r i b u t i n g p r i z e s by chance among purchasers of t i c k e t s " . However, according to the Code, the term " l o t t e r y scheme" encompasses a l l games of chance i n c l u d i n g l o t t e r i e s and r a f f l e s (or any d e r i v a t i v e t h e r e o f ) , w h e e l games, c a r d games, and p a r i - m u t u e l b e t t i n g . I t s p e c i f i c a l l y p r o h i b i t s dice games, three card monte, punch boards and c o i n t a b l e s as w e l l as such a c t i v i t i e s as bookmaking, pool s e l l i n g and making or r e c o r d i n g bets. The p e r t i n e n t part of the Code (Part V, Sections 179-192 Disor d e r l y Houses, Gaming and Betting) has i t s o r i g i n s i n E n g l i s h s t a t u t e law and i s , t h e r e f o r e , a p r o d u c t of parliamentary rather than common law (Osborne and Campbell, 1986). Before the confederation of Canada, the Gaming Act of Great B r i t a i n banned l o t t e r i e s and games of chance. A f t e r Confederation, English gaming laws were incorporated into the f i r s t C r i m i n a l Code of 1892 as a "general Act r e l a t i n g to lo t t e r i e s and gaming" (Osborne and Campbell, 1986; p. 3). It 91 was i l l e g a l to keep a common gaming house, gamble i n public conveyances, cheat at play or conduct l o t t e r i e s (with some l i m i t e d e x c e ptions). The r e v i s i o n of the Code i n 1953 saw d e f i n i t i o n a l , r a t h e r than substantive, changes made to the gaming sections. From the mid-1930's onward, Quebec had a c t i v e l y lobbied f o r the l e g a l i z a t i o n of l o t t e r i e s . A l t h o u g h Quebec had passed provincial legislation which would have permitted the conduct of l o t t e r i e s , the province was constrained by the contents of the Code. The issue of l e g a l i z i n g l o t t e r i e s was reviewed i n 1934 and 1954, and debated throughout the 1960's. P r o - l o t t e r y public sentiment gathered momentum during the l a t e 1960's. In December, 1967, Ms. Mary English, a pr i v a t e c i t i z e n , a c t i v e l y lobbied f o r the l e g a l i z a t i o n of l o t t e r i e s on the basis that $100 mi l l i o n was being spent annually on fore i g n l o t t e r i e s which took the money out of the country. She presented the Justice Department with a 30 0,000 signature p e t i t i o n i n f a v o u r of l e g a l i z a t i o n . L a t e r i n t h a t same month, the Commons gave a f i r s t reading to a B i l l which p r o p o s e d t h a t e i t h e r f e d e r a l or p r o v i n c i a l l o t t e r i e s be permitted. "This p r o v i s i o n was d i r e c t e d p r i m a r i l y at the p r o v i n c e s w h i ch would be ab l e to l i c e n c e r e l i g i o u s and c h a r i t a b l e o r g a n i z a t i o n s to o p e r a t e l o t t e r i e s " (Canada Cou n c i l , 1981; p. 2). Although Quebec was i n favour of the B i l l , i t was opposed by the At t o r n e y s - G e n e r a l of Ontario and 92 B r i t i s h Columbia, as w e l l as various protestant r e l i g i o u s groups. As a consequence of the change of government f o l l o w i n g the 1968 e l e c t i o n , t h i s l e g i s l a t i v e proposal died on the order paper. In 1969, Section 190 of the Code was amended to permit both the Government of Canada and the provinces to conduct or a u t h o r i z e l o t t e r y schemes. The amendments p e r m i t t e d c h a r i t a b l e and r e l i g i o u s o r g a n i z a t i o n s t h a t had obtained a l i c e n c e from the L i e u t e n a n t G o v e r n o r i n C o u n c i l of a province, to conduct and manage lottery schemes provided that the proceeds generated were used f o r c h a r i t a b l e or r e l i g i o u s purposes. Subsequently, each of the provinces d r a f t e d t h e i r own r e g u l a t i o n s v i s - a - v i s the l i c e n c i n g of l o t t e r i e s and g a m b l i n g a c t i v i t i e s . A d d i t i o n a l l y , the governments i n Quebec, Ontario, Manitoba, Saskatchewan, Alberta and British Columbia int r o d u c e d the sale of l o t t e r y t i c k e t s . In 1973, Ottawa introduced an Olympic Lottery. The proceeds of t h i s new scheme were to be used to finance the 1976 Olympic Games. Ottawa had undertaken the l o t t e r y on the understanding t h a t , i n f u t u r e , Quebec would not approach the f e d e r a l government with a d d i t i o n a l requests f o r f i n a n c i a l support f o r the games. In 1976, the f e d e r a l government announced the e s t a b l i s h m e n t of L o t o Canada, a Crown Corporation that would continue the Olympic L o t t e r y beyond 93 the conclusion of the games. I t was envisioned t h a t the l a r g e s t proportion of the revenue generated by the extended lottery would be used to reduce the Montreal Olympic Games de f i c i t and fund the 1978 Commonwealth Games (82.5 p e r c e n t ) ; 12 percent would be d i s t r i b u t e d to the provinces on the basis of t i c k e t sales, and f i v e percent would be retained by the federal government and used to fund s p o r t s , r e c r e a t i o n a l and f i t n e s s programs. With the e xception of Quebec, the provinces objected to an extension of the f e d e r a l l o t t e r y on the basis t h a t i t would a f f e c t the revenues of the p r o v i n c i a l l o t t e r i e s (Canada C o u n c i l , 1981). F o l l o w i n g a p r o t r a c t e d dispute between the provinces and the f e d e r a l government around c o n t r o l over l o t t e r y j u r i s d i c t i o n s , the f e d e r a l government agreed to withdraw from the l o t t e r y market on December 31, 1979. However, this agreement was not f o r m a l i z e d u n t i l 1985. U l t i m a t e l y , the provinces agreed to pay the f e d e r a l government $24 m i l l i o n a year (indexed), and to c o n t r i b u t e $100 m i l l i o n to the Calgary Winter Olympic Games. In a d d i t i o n to withdrawing i t s p a r t i c i p a t i o n i n the lottery t i c k e t market, the federal government was to proclaim f u r t h e r amendments to the Code no l a t e r than December 5, 1985.1 As a result of this agreement between the federal government and the provinces, the C r i m i n a l Code ( L o t t e r i e s ) Amendment 94 Act, 1985 was passed. The Code no longer makes reference to the lawfulness of l o t t e r i e s conductd by the Government of Canada. "The provinces now have sole j u r i s d i c t i o n over l o t t e r i e s and other s p e c i f i c gaming operations, and that j u r i s d i c t i o n is now much broader than the i n i t i a l grant of power in 1969" (Osborne and Campbell, 1986). Gambling in Briti s h Columbia In B r i t i s h Columbia, i n d i v i d u a l s may gamble by purchasing l o t t e r y and r a f f l e t i c k e t s , engaging i n pari-mutuel b e t t i n g , playing bingo or attending casinos events. During casino events, gambling i s l i m i t e d by p r o v i n c i a l r e g u l a t i o n s to playing the card game b l a c k j a c k , and b e t t i n g on r o u l e t t e wheels. However, at most casino events, wheels of chance are r e g u l a r l y i ncluded among the games which are a v a i l a b l e . The focus here i s on l o t t e r i e s , bingos and casinos. L o t t e r i e s The Western Canada Lottery Foundation (W.C.L.F.) was formed i n 1974 to administer the major l o t t e r y games i n Manitoba, Saskatchewan, A l b e r t a , B r i t i s h Columbia, the Yukon, and l a t e r , the Northwest T e r r i t o r i e s . In 1984, B r i t i s h Columbia withdrew from the Western Canada Lottery Foundation after the other provinces refused to agree to move the Foundation's headquarters from Winnipeg to Kamloops. The province formed the B.C. Lottery Corporation which: (i) continued to provide 95 the v a r i e t y of games previously provided by the Western Canada Lottery Foundation; and, (ii) represented the province of B r i t i s h C o l u m b i a t o the I n t e r - p r o v i n c i a l L o t t e r y Corporation which administers those l o t t e r y games th a t are a v a i l a b l e n a t i o n - w i d e . In s p i t e of h a v i n g t o r e p l a c e computer termin a l s (previously provided by the W.C.L.F.), rent and improve a new headquarters in Kamloops, and hire and t r a i n s t a f f , the then P r o v i n c i a l S e c r e t a r y p r e d i c t e d increased revenues to the province as a r e s u l t of the new arrangement. By 1985, " l o t t e r y f e v e r (was) reaching epidemic l e v e l ( s ) i n B r i t i s h Columbia" (Vancouver Sun, A p r i l 15, 1985) and i t was expected t h a t revenues from l o t t e r y t i c k e t s i n f i s c a l 1984-8 5 would be twice what they had been two years previously. As shown i n Figure 4:1, sales f o r the f i s c a l year ended March 31, 1986 were $330 m i l l i o n ; an increase of 34.7 percent over the previous year (B.C. L o t t e r y Corporation, F i r s t Annual Report 1986). For each d o l l a r spent on a l o t t e r y t i c k e t , the p r o v i n c i a l government r e c e i v e s approximately 34 cents. The balance of t h e d o l l a r i s d i v i d e d ( u n e q u a l l y ) a m o n g p r i z e s , a d m i n i s t r a t i o n , r e t a i l e r s , f e es/bonuses and the f e d e r a l government. For the f i s c a l year ended 1985-86, net revenues to the Province of B r i t i s h Columbia from the sale of l o t t e r y tickets were $104 million, while the Government of Canada 96 Figure 4:1 600 80-81 81-82 82-83 83-84 84-85 85-ICfTTERY TICKET SALES IN BRITISH COLUMBIA INCOME AND EXPENDITURE COMPARISON Source: B r i t i s h Columbia Lottery Corporation, F i r s t Annual Report 1986 The Vancouver Sun ( A p r i l 15, 1985) 97 r e c e i v e d $9 m i l l i o n ( B r i t i s h Columbia L o t t e r y Corporation, F i r s t Annual Report 198 6). The p r o v i n c i a l government's share of the l o t t e r y d o l l a r is d e p o s i t e d i n the L o t t e r y Fund A c c o u n t . T h i s f und was e s t a b l i s h e d i n 1974 and i t provides revenues to c u l t u r a l , r e c r e a t i o n a l , h e r i t a g e , h e a l t h and o t h e r n o n - p r o f i t and c h a r i t a b l e o r g a n i z a t i o n s . While Ontario and the western provinces earmark l o t t e r y p r o f i t s f o r funding these kinds of a c t i v i t i e s , o r g a n i z a t i o n s , and s p e c i a l programs, i n Quebec and the A t l a n t i c provinces, l o t t e r y revenues are absorbed i n t o general revenues ( L i v e r n o i s , 1986).3 In just over a decade, l o t t e r y t i c k e t sales have mushroomed. In f i s c a l 1970-71, the revenues generated from l o t t e r y t i c k e t sales i n Canada amounted to approximately $116 m i l l i o n , i n constant 1971 d o l l a r s . By 1979-80, t i c k e t sales, n a t i o n a l l y , had reached $637 m i l l i o n , i n constant 1971 d o l l a r s , or $1.5 b i l l i o n i n 1979-80 d o l l a r s (Canada Co u n c i l , 1981; p.8). In 1984-85, l o t t e r i e s generated $2.2 b i l l i o n i n current d o l l a r s ( L i v e r n o i s , 1986). For some i n d i v i d u a l s the "controversy concerning the equity and morality of l o t t e r i e s " has p e r s i s t e d (Canada C o u n c i l , 1981; p. 8). Those i n f a v o u r of l o t t e r i e s argue t h a t , because i n d i v i d u a l s w i l l always gamble, the p r o v i s i o n of g a m b l i n g a c t i v i t i e s by government both c o n t r o l s i l l e g a l 98 gambling a c t i v i t i e s and i n c r e a s e s r e venue f l o w i n g i n t o p r o v i n c i a l c o f f e r s r a t h e r t h a n t o i l l e g a l , g a m b l i n g syndicates. Those opposing the government's involvement i n the gambling i n d u s t r y argue t h a t the government i s encouraging i n d i v i d u a l s to gamble to a greater degree than they normally would. This argument has become even more cogent as the marketing f o r l o t t e r y t i c k e t s has become more polished and pervasive. In a d d i t i o n , the government i s accused of "breeding false hope and complacency" (Vancouver Sun, Ap r i l 26, 198 5) which, i n t u r n , reduces "the moral f i b r e of s o c i e t y " (Johnson, 1976; p. 644 ). However, a s i d e from these m o r a l arguments, l o t t e r i e s are considered by some to represent a regressive ( a l b e i t voluntary) tax which i s u l t i m a t e l y more expensive to administer than other forms of t a x a t i o n (Johnson, 1976). There i s also disagreement as to whether a government-owned l o t t e r y should, i n f a c t , be considered a form of t a x a t i o n . On the one hand, i f lottery tickets are considered a consumer item, they cannot be considered from a tax viewpoint. On the other hand, i n s o f a r as the p r o f i t s from l o t t e r y t i c k e t sales are returned to the s t a t e , " i t is th e r e f o r e appropriate to evaluate t h e i r source by the usual tax standards" (Weinstein and D e i t c h , 1974; p. 83). L i v e r n o i s (1986) argues that, not only are l o t t e r i e s a regressive tax, but also, i n the western 99 provinces, classes to they r e d i s t r i b u t e income higher economic classes. from the lower economic L i v e r n o i s (1986) begins his argument by pointing out t h a t the Crown, with r e s p o n s i b i l i t y vested i n the provinces, has the monopoly on l o t t e r y t i c k e t schemes. The l o t t e r y industry is c l e a r l y operated by a c a r t e l which e f f e c t i v e l y p r o h i b i t s any other competition i n the market. The p r i c e t h a t consumers c u r r e n t l y pay i s the d i f f e r e n c e between the t i c k e t price and the expected value of the t i c k e t . However, " i f th i s good were supplied by a p e r f e c t l y competitive i n d u s t r y , then i n the long run t h i s p r i c e would equal the minimum average cost of supplying the good" ( L i v e r n o i s , 1986; p. 3). Therefore, the p r i c e charged by the c a r t e l i n cludes a monopoly rent component. In a d d i t i o n , i f l o t t e r y t i c k e t s were supplied from p r i v a t e sources, they would be subject to an ad valore m sales tax (i.e. a tax i n proportion to the estimated value of goods), i n a l l provinces except A l b e r t a (a province t h a t does not l e v y sales t a x ) . "The monopoly rent component of a price charged to consumers can be viewed as an i m p l i c i t tax since t h i s is the amount i n excess of the competitive p r i c e t h a t consumers are f o r c e d to pay" ( L i v e r n o i s , 1986; p. 5). L i v e r n o i s c a l c u l a t e d the ad  valore m tax r a t e s which are i m p l i c i t i n the p r i c e s of l o t t e r y t i c k e t s by t a k i n g the r a t i o of sales revenue to the t o t a l cost. At a competitive p r i c e , the r a t i o would equal unity 100 and the " i m p l i c i t tax rat e would be zero" ( L i v e r n o i s , 1986, p. 5). U t i l i z i n g t h i s method, he found t h a t i n 1984-85, the i m p l i c i t tax ra t e s ranged, across the provinces, as f o l l o w s : 55 percent (Quebec), 44 percent (Ontario and the A t l a n t i c p r o v i n c e s ) , and 52 percent (western provinces). L i v e r n o i s concluded that l o t t e r i e s are among the goods which are most hea v i l y taxed by the provinces. In a t t e m p t i n g t o d e t e r m i n e the r e g r e s s i v i t y of l o t t e r y t i c k e t s , L i v e r n o i s reviewed four studies which had been conducted i n the United States. In a study by Spiro (1974), a questionnaire was used to obtain data from the winners of l o t t e r i e s i n Pennsylvania. Although the findings i n d i c a t e d t h a t "the l o t t e r y i s regre s s i v e among tha t subset of the population that purchases l o t t e r y t i c k e t s , that subset i s not n e c e s s a r i l y r e p r e s e n t a t i v e of the population" ( L i v e r n o i s , 1986; p. 6). Three other studies by Brenner and C l o t f e l t e r (1975), Suits (1977) and C l o t f e l t e r (1979) surveyed the general population i n various American st a t e s and found "overwhelming evidence of r e g r e s s i v i t y " ( L i v e r n o i s , 1986; p. 6). For example, the Brenner and C l o t f e l t e r study reported t h a t , i n Connecticut, f a m i l i e s among the lower income groups spent .55 percent of t h e i r annual income on public l o t t e r i e s while higher income f a m i l i e s spent only .06 percent of t h e i r annual income. 101 In order to determine the r e g r e s s i v i t y of Canadian l o t t e r i e s , L i v e r n o i s c o n d u c t e d a s u r v e y of 545 randomly s e l e c t e d Edmonton households. A f t e r applying s e v e r a l s t a t i s t i c a l t e s t s to his data, he found t h a t Canadian l o t t e r i e s were regr e s s i v e ; however, they were s l i g h t l y l e s s regressive than those in the United States. Nevertheless, "compared to other types of taxes i n Canada, the i m p l i c i t tax on l o t t e r i e s is above average i n r e g r e s s i v i t y " ( L i v e r n o i s , 1986; p. 9). A s l i g h t l y d i f f e r e n t perspective on the issue of r e g r e s s i v i t y i s provided by Suits (1979 ). He maintains t h a t the 'take-out' r a t e of any gambling game is r e l a t e d to i t s degree of r e g r e s s i v i t y . The take-out r a t e i s t h a t part of the proceeds tha t goes to the s t a t e , the c h a r i t y or other o r g a n i z e r and, therefore, is not divided among the winners of the game. For example, American s t a t e l o t t e r i e s have take-out r a t e s higher than 50 percent and are considered by Suits to be highly regressive. Because the Canadian state enjoys a monopoly, i t i s free to set the take-out rate a r b i t r a r i l y , regardless of the numbers of bettors or winners. L i v e r n o i s (1986) comments on the equally c o n t r o v e r s i a l issue of r e d i s t r i b u t i o n . While l o t t e r y revenues i n Quebec and the A t l a n t i c provinces are d i r e c t e d i n t o general revenues, the l o t t e r y revenues i n a l l other provincs are used to support c u l t u r a l , r e c r e a t i o n a l , sports, h e a l t h and other programs. Therefore, i n these provinces, " l o t t e r i e s r e s u l t i n a d i r e c t 102 t r a n s f e r of income from the consumers of l o t t e r i e s to the consumers of the designated a c t i v i t i e s and programs which are supported by l o t t e r y p r o f i t s " ( L i v e r n o i s , 1986; p. 9). Given th a t the consumers of c u l t u r a l , r e c r e a t i o n a l , sports and other programs are more l i k e l y to be from higher economic classes, L i v e r n o i s argues that l o t t e r i e s r e d i s t r i b u t e money from the lower economic groups i n t o s e r v i c e s t h a t benefit those i n d i v i d u a l s i n higher economic groups. Based on his fin d i n g s , he recommends tha t t i c k e t p r i c e s be lowered i n order to reduce the i m p l i c i t tax rates and tha t a l l provinces d i r e c t t h e i r l o t t e r y d o l l a r s i n t o general revenues. Bingos and Casinos Since 1969, bingo sessions and casino events o c c u r r i n g i n B r i t i s h Columbia have been conducted s o l e l y by n o n - p r o f i t , c h a r i t a b l e or r e l i g i o u s o r g a n i z a t i o n s . Both bingo and casino gaming are defined under the 'Terms and Conditions Respecting L i c e n s i n g of L o t t e r y Events i n B r i t i s h Columbia'. Bingo is defined as "the game known as bingo" while casino gaming i s defined as the "games known as blackjack and r o u l e t t e and approved forms of wheels of fortune played at a function held by a l i c e n s e d o r g a n i z a t i o n " . Bingo Bingo was once perceived as a benign game played i n church basements by housewives and grandmothers; however, i t has now 103 become big business. As a form of gambling, bingo has o f t e n been dismissed l i g h t l y because of the perception that only small amounts of money were involved. For example, there was a c e i l i n g on wagering i n t h a t the i n d i v i d u a l s i n v o l v e d spent a fixed sum of money to purchase a number of cards that would be played f o r the evening. There was also a l i m i t on how many cards the i n d i v i d u a l could reasonably play. However, th i s view is i n a c c u r a t e . I t i s safe to say t h a t , presently, many i n d i v i d u a l s spend upwards of $50 per bingo session. In a d d i t i o n , the increase i n the number of bingo parlours has made i t possible f o r an i n d i v i d u a l to play a l l day and most of the night. In B r i t i s h C o l u m b i a , bingo s e s s i o n s have a l w a y s been conducted f o r the b e n e f i t of c h a r i t i e s , and the a c t i v i t y has a l w a y s been l u c r a t i v e . In the p a s t , t h e r e were f e w e r charities conducting bingo sessions than there are now. Very l i t t l e c o mpetition e x i s t e d between them and there was an 'easy going' r e l a t i o n s h i p between the managers of the bingo s e s s i o n s and the L o t t e r y I n s p e c t o r s employed by the government to e n f o r c e the p r o v i n c i a l r e g u l a t i o n s ( i . e . , B r i t i s h Columbia L o t t e r y Regulations (B.C. Reg. 265/78)). The R e g u l a t i o n s were vague i n some i n s t a n c e s , but the i n s p e c t o r s i n t e r p r e t e d them s a t i s f a c t o r i l y ( a l b e i t , a r b i t r a r i l y ) a t the l o c a l l e v e l . There was, perhaps, dishonesty on the part of some i n d i v i d u a l s and the public o f t e n r e c e i v e d l e s s than a f a i r share of the gross revenues; 104 however, generally the c h a r i t i e s had a source of revenue and bingo players had r e l a t i v e l y few choices as to how and where they played the game. In 1984, s e v e r a l events occurred, i n quick succession, which d r a s t i c a l l y changed the foregoing s i t u a t i o n and s i g n a l l e d the emergence of the s o - c a l l e d 'bingo i n d u s t r y ' i n B r i t i s h Columbia. P r i v a t e entrepreneurs invaded the t e r r i t o r y which had p r e v i o u s l y been d o m i n a t e d e x c l u s i v e l y by c h a r i t i e s . Whereas bingos had been held i n church basements, small community halls or s e r v i c e clubs, businessmen began to b u i l d or refurbish 'bingo palaces' which could seat between 500 and 1,000 people. With the i n s t a l l a t i o n of the l a t e s t e l e c t r o n i c equipment, bingo moved into the age of 'high tech' gambling. Although these businessmen were p r o h i b i t e d by the p r e v a i l i n g Regulations from a c t u a l l y applying f o r l i c e n c e s or conducting the bingo sessions, they rented the new or r e f u r b i s h e d halls to n o n - p r o f i t o r g a n i z a t i o n s . The h a l l s were re n t e d both afternoons and evenings, seven days a week. The r e n t a l fees ranged from $300 f o r an afternoon bingo session, to between $500 and $850 per evening. In a d d i t i o n , revenues were generated by concession f a c i l i t i e s . Businessmen estimated t h a t t h e i r annual revenues from any one of these buildings would be, minimally, a half a m i l l i o n d o l l a r s (Vancouver Sun, August 3, 1985). 105 There were suggestions t h a t the l a r g e r bingo parlours owned by p r i v a t e entrepreneurs were squeezing out the smaller, t r a d i t i o n a l bingos (Vancouver Sun, A p r i l 3, 1985). The c o m m e r c i a l bingo h a l l s , b e s i d e s b e i n g more a t t r a c t i v e , c h a r g e d h i g h e r p r i c e s but o f f e r e d l a r g e r p r i z e s . F o r f i n a n c i a l or other reasons, many of the operators of the s m a l l e r t r a d i t i o n a l b i ngos c o u l d not compete. Almost o v e r n i g h t , t h e f a c e o f t h e b i n g o i n d u s t r y c h a n g e d d r a m a t i c a l l y . In August, 1985, i n v e s t i g a t i v e r e p o r t e r s with the Vancouver  Sun published a r t i c l e s addressing the "bingo controversy" and the s o - c a l l e d "bingo wars". They disclose d t h a t some of the big commercial parlours were owned or backed by f a m i l i a r p o l i t i c a l personnages. I t was even suggested t h a t the then Premier of the province had a d i s t a n t i n t e r e s t i n the bingo i n d u s t r y i n t h a t a s t o r e owned by hi s f a m i l y had been converted into a "bingo barn". The n o n - p r o f i t o r g a n i z a t i o n s were divided on the s i g n i f i c a n c e of these new developments. Those charities that had operated the small bingos complained t h a t they were being squeezed out. However, other c h a r i t i e s r e p o r t e d t h a t they were generating up to three times t h e i r previous revenue. Some groups, who had rented sessions i n the new commercial h a l l s but who had w i t h d r a w n , a l l e g e d t h a t the owners of the 106 c o m m e r c i a l h a l l s were a t t e m p t i n g t o c o n t r o l the bingo sessions, i n v i o l a t i o n of the L o t t e r y Regulations. As a r e s u l t of the c o n t r o v e r s y s u r r o u n d i n g the bingo ind u s t r y , the adequacy of the e x i s t i n g Regulations governing the obtaining of l o t t e r y l i c e n c e s and the conduct of the bingo sessions, was examined. In June, 1986, the newly created B.C. Public Gaming Control Branch issued new "Policy D i r e c t i v e s Respecting the L i c e n s i n g of L o t t e r y Events i n B r i t i s h Columbia", which superseded the L o t t e r y Regulations (B.C. Reg. 265/78). The new P o l i c y D i r e c t i v e s c o n t a i n e d s e v e r a l n o t e w o r t h y features which have both affected the bingo component of the gaming industry and increased the revenues fl o w i n g to the p r o v i n c i a l government from t h i s source.. F i r s t , the e l i g i b i l i t y requirements f o r those n o n - p r o f i t organizations that could r e c e i v e l i c e n c e s were made more s t r i n g e n t . As a r e s u l t of the new P o l i c y D i r e c t i v e s , l i c e n c e s to conduct bingo s e s s i o n s are i s s u e d to c h a r i t a b l e and r e l i g i o u s o r g a n i z a t i o n s only i f they have been both r e g i s t e r e d under the S o c i e t y A c t (R.S.B.C. 1979, c.239) and p r o v i d i n g a s e r v i c e to the community f o r a period of 12 months p r i o r to the date of a p p l i c a t i o n . In a d d i t i o n , the o r g a n i z a t i o n had to have a c h a r i t a b l e object or purpose; namely, "the r e l i e f of poverty, advancement of education or r e l i g i o n , and f o r 107 other purposes b e n e f i c i a l to the community". These new e l i g i b i l i t y r e q u i r e m e n t s e f f e c t i v e l y p r e v e n t e d t h e establishment of o r g a n i z a t i o n s s o l e l y f o r the purpose of raising money through the conduct of bingo games. Second, the new D i r e c t i v e s s t i p u l a t e d t h a t no more than 60 percent of the gross proceeds could be given away as p r i z e payouts at any bingo event. They also i n d i c a t e d (as did the previous regulations) the t o t a l amount of the gross proceeds th a t must be r e t a i n e d by the o r g a n i z a t i o n . For example, where the aggregate value of the p r i z e awards i n a l i c e n s e y e a r exeeds $60,000, a minimum of 25 p e r c e n t of gross proceeds must be given to charity. On the other hand, where the aggregate value of the p r i z e awards i n a l i c e n s e year does not exceed $20,000, a minimum of 15 percent of gross proceeds must be given to charity. Since the l a r g e r h a l l s could seat more people, and t h e r e f o r e g a r n e r h i g h e r gross p r o c e e d s , t h e i r p r i z e b o a r d s ( o r 60 percent of the gross revenues) were considerably l a r g e r than those found i n smaller h a l l s . This "60 percent r u l e " has had a negative impact on c h a r i t i e s holding bingo sessions i n s m a l l e r h a l l s i n t h a t they cannot o f f e r the higher p r i z e s t h a t are simultaneously o f f e r e d i n the l a r g e r h a l l s . Indeed, a number of smaller bingo halls, which either could not match the prizeboards of the large h a l l s or keep step with the changing nature of the i n d u s t r y , have closed. 108 T h i r d , i n a d d i t i o n to the o l d rule t h a t no jackpot f o r any s i n g l e game c o u l d e x c e e d $ 1,000, the P o l i c y D i r e c t i v e s s t i p u l a t e d t h a t there was to be a $7,500 c e i l i n g on the t o t a l amount of pr i z e money given away i n any one bingo session. P r e v i o u s l y , operators could o f f e r as many $1,000 games i n each bingo session as t h e i r gross proceeds would allow. For example, one o r g a n i z a t i o n o f f e r e d 10 games, a l l p a y i n g between $700 and $1,000 per game, for a $35 entrance fee. At the end of the e v e n i n g , the o r g a n i z a t i o n had p a i d out approximately $10,000, and netted $14,000 f o r the c h a r i t y . I t was c a l c u l a t e d t h a t the ra t e of r e t u r n was $160 f o r each minute of work.-* The "$7,500 maximum rule" has also significantly affected the rate of r e t u r n to winning players. Those players who were a t t r a c t e d to these 'high r o l l i n g ' sessions presently drive to Washington State to play in games where jackpots may reach as much as $100,000 each. Fourth, i n order to more e f f e c t i v e l y c o n t r o l and re g u l a t e the bingo i n d u s t r y , the P o l i c y D i r e c t i v e s s t i p u l a t e d t h a t any bingo operation with a prize b o a r d of over $1,000, must use paper cards t h a t had been purchased from the p r o v i n c i a l government. Pr e v i o u s l y , bingo operators were able to o f f e r e i t h e r disposable paper cards or the t r a d i t i o n a l re-usable 109 hard cards. By implementing t h i s s t i p u l a t i o n (with some e x c e p t i o n s ) , the p r o v i n c i a l government c r e a t e d i t s own monopoly i n bingo paper while, at the same time, i n c r e a s i n g the o p e r a t i n g expenses i n c u r r e d by the o r g a n i z a t i o n s conducting the bingo sessions. The operators no longer had the freedom to use hard cards which could be re-used, and that, t h e r e f o r e , reduced operating costs. In a d d i t i o n , the 'free market 1, i n which the prices of bingo supplies were kept down by the fo r c e s of competition, was removed. By cr e a t i n g and then c o n t r o l l i n g a monopoly, the p r o v i n c i a l government assured i t s e l f of a source of continuous revenue. F i f t h , under the new P o l i c y D i r e c t i v e s , the cost of the bingo l i c e n c e t o n o n - p r o f i t o r g a n i z a t i o n s has i n c r e a s e d s u b s t a n t i a l l y . The cost was increased from one percent of the t o t a l p r i z e money awarded i n any one session, to one percent of the gross revenues generated from the session. S i n c e the D i r e c t i v e s a l s o e s t a b l i s h e d a c e i l i n g f o r the prizebo a r d f o r any session (a f i x e d $7,500 ), the revenue from l i c e n c e f e e s would have been l i m i t e d . T h e r e f o r e , the l i c e n s i n g fee had to change and by s e t t i n g the fee at one percent of the gross revenue, the c e i l i n g on the cost of the l i c e n s e t o n o n - p r o f i t o r g a n i z a t i o n s has been r a i s e d considerably. C l e a r l y , l i c e n c e fees f o r n o n - p r o f i t groups, e s p e c i a l l y those w i t h l a r g e bingo o p e r a t i o n s , are a s i g n i f i c a n t source of revenue f o r the government. 110 Casinos The "Policy Directives Respecting Licensing of Lottery Events i n B r i t i s h Columbia" ( e f f e c t i v e June 3, 1986) apply to the l i c e n s i n g of casinos as w e l l as bingos. L i k e bingo l i c e n c e s , casino l i c e n c e s may only be held by n o n - p r o f i t organizations. Each n o n - p r o f i t o r g a n i z a t i o n may apply f o r three l i c e n c e s i n any year. Each l i c e n c e allows the o r g a n i z a t i o n to operate a casino f o r up to three nights. Although, at one time, n o n - p r o f i t o r g a n i z a t i o n s would host and manage t h e i r own 'casino nights', f o r the past s e v e r a l years the usual procedure has been for a non-profit agency to obtain a casino l i c e n c e and then c o n t r a c t with a p r i v a t e , c o m m e r c i a l c a s i n o o p e r a t o r . The c o m m e r c i a l o p e r a t o r s undertook r e s p o n s i b i l i t y f o r securing a l o c a t i o n , providing the n e c e s s a r y gaming equipment and p e r s o n n e l , p l a c i n g advertisements, and generally organizing and conducting the events. In May, 1986, the P r o v i n c i a l S e c r e t a r y announced th a t i n order to c u r t a i l and to p r o t e c t the growing gaming industry from 'organized crime', i t was necessary to implement more s t r i n g e n t r e g u l a t i o n s . As a c o nsequence, the f o l l o w i n g policies were adopted: * b e t t i n g l i m i t s were dropped from $5.00 to $2.00; * the hours of operation were l i m i t e d to any period 111 of s i x hours a f t e r 6:00 p.m.; * the p o l i c y t h a t the casino had to be held as an adjunct to a social event would be enforced; * a maximum of 12 licences per week were to be allocated within the Greater Vancouver Regional Dis t r i c t ; and * n o n - p r o f i t groups were to r e c e i v e 50 percent r a t h e r than 35 percent of the gross proceeds. When the new P o l i c y D i r e c t i v e s were introdu c e d , n o n - p r o f i t groups expressed concern that the lower b e t t i n g l i m i t s and s h o r t e r hours would have a s e v e r e i m p a c t on the gross revenues generated at casino events. Although the c h a r i t i e s were to be given 50 percent, instead of 35 percent, i t was a n t i c i p a t e d that, o v e r a l l , the increase i n the percentage f l o w i n g to n o n - p r o f i t s would not compensate f o r the lo w e r gross revenues which would r e s u l t from the lower b e t t i n g lim i t s (Vancouver Sun, May 3, 1986). Those i n d i v i d u a l s who were i n v o l v e d i n the f u n d - r a i s i n g a c t i v i t i e s of the n o n - p r o f i t o r g a n i z a t i o n s formed themselves i n t o a c o a l i t i o n and proceeded to lobby policy-makers i n order to have the b e t t i n g l i m i t s once again r a i s e d to $5.00. In A p r i l , 1987, the p r o v i n c i a l government announced new casino r e g u l a t i o n s which were to be e f f e c t i v e on May 1st. The maximum bet was once again i n c r e a s e d to $5.00. The c h a r i t i e s would continue to r e c e i v e 50 percent of the gross p r o c e e d s . However, a t the same t i m e , the government 112 i n c r e a s e d i t s share of the gross proceeds from f i v e percent to 10 percent. The government announced the formation of a Gaming Commission and c h a r g e d the members w i t h the r e s p o n s i b i l i t y f o r compiling a r e p o r t on gambling i n B r i t i s h Columbia. At the same time, a moratorium was declared on the issuance of any new casino l i c e n c e s u n t i l November, 1987, at which time the Commission was expected to submit i t s report (Vancouver Sun, Apri l 2, 1987). C u r r e n t l y , t h r e e groups are i n t e r e s t e d i n e f f e c t i n g a ' l i b e r a l i z a t i o n ' of the gaming r e g u l a t i o n s (Vancouver Sun, March 1 8, 1 987). The n o n - p r o f i t o r g a n i z a t i o n s have e f f e c t i v e l y lobbyed to have casino b e t t i n g l i m i t s i n c r e a s e d i n order to maximize t h e i r percentage of the gross proceeds. However, because no more than 12 casino licences are granted each week i n the G r e a t e r Vancouver R e g i o n a l D i s t r i c t , and those l i c e n c e s are d i s t r i b u t e d through a l o t t e r y , many non-p r o f i t o r g a n i z a t i o n s are excluded from the opportunity to r a i s e money by h o l d i n g a c a s i n o . In o r d e r to enhance tourism, the p r i v a t e s e c t o r are i n t e r e s t e d i n seeing "world c l a s s " casinos es t a b l i s h e d i n r e s o r t areas such as Whistler. F i n a l l y , the government is i n t e r e s t e d i n both r e g u l a t i n g the gaming industry and increasing the revenues which flow to the province from th i s source. 113 The Government and Gambling Throughout the recent e v o l u t i o n of the gaming industry i n B r i t i s h C o l u m b i a , the government's p o s i t i o n v i s - a - v i s l e g a l i z e d gambling has been ambiguous. On the one hand, policy-makers have made pu b l i c statements to the e f f e c t t h a t there w i l l be no extension of l e g a l i z e d gambling beyond t h a t which i s provided by n o n - p r o f i t groups. On the other hand, the government has moved to extend the o p p o r t u n i t i e s to gamble on l o t t e r y t i c k e t s and i n casinos. For example, i n an attempt to boost revenue, the B.C. L o t t e r y Corporation has permitted the sale of 'pull tabs' i n l i c e n c e d premises and bingo parlours.5 I n t h e F a l l o f 1 9 8 6 , the A t t o r n e y - G e n e r a l announced the government's i n t e n t i o n t o both e s t a b l i s h casinos and introduce s l o t machines on two of the f e r r i e s which run between V i c t o r i a and S e a t t l e . By e a r l y May, 1987 slot machines had been installed and were operative. The views taken toward gambling have changed over time. H i s t o r i c a l l y , gambling has been regarded as ' e v i l 1 , ' s i n f u l ' , and 'criminal'. More r e c e n t l y , excessive gambling has been l a b e l l e d as a disease (Conrad, 1981; B l a s z c z y n s k i , 1985; Custer, 1979; Dickerson, 1981). Generally, the a c t i v i t y has b e e n ( a n d s t i l l i s ) s e e n as an u n d e s i r a b l e p u r s u i t . Therefore, i n order to j u s t i f y any expansion i n the f i e l d of l e g a l i z e d g a m b l i n g , t h e g o v e r n m e n t must p r o v i d e a s u f f i c i e n t l y persuasive r a t i o n a l e . 114 In the past, the arguments i n favour of expanding gambling op p o r t u n i t i e s have i n c l u d e d : taxes on gambling a c t i v i t i e s provide a s i g n i f i c a n t source of revenue f o r the government; money from gambling a c t i v i t i e s can be d i v e r t e d to highly desirable a c t i v i t i e s undertaken by c u l t u r a l , r e c r e a t i o n a l , e d u c a t i o n a l or c h a r i t a b l e community groups; e x t e n d i n g o p p o r t u n i t i e s to gamble l e g a l l y c u r t a i l s i l l e g a l gambling a c t i v i t y ; c e r t a i n gambling a c t i v i t i e s ( p a r t i c u l a r l y casinos) w i l l enhance t o u r i s m ; B.C. d o l l a r s w i l l be k e p t i n the province r a t h e r than l o s t to gambling establishments which are l o c a t e d i n the United States; and, the gaming industry w i l l provide new employment opportunities. The government has actively pursued opportunities to increase i t s revenues from gambling a c t i v i t i e s by i n t r o d u c i n g more opportunities to gamble. The developments have included new l o t t e r i e s , the i n t r o d u c t i o n of s l o t machines, and plans f o r f l o a t i n g casinos. Higher revenues are also a n t i c i p a t e d from the c r e a t i o n of the monopoly on bingo paper and inc r e a s e d licence fees. However, at the same time, the government has ( reduced the revenues f l o w i n g to n o n - p r o f i t agencies through the i m p o s i t i o n of increased r e g u l a t i o n of bingo and casinos. F unding S o c i a l S e r v i c e s F r o m the P r o c e e d s of Gam b l i n g  A c t i v i t i e s A l t h o u g h the f o r e g o i n g d i s c u s s i o n has been v e r y b r o a d -115 r a n g i n g , t h e r e are s e v e r a l i s s u e s w h i ch d e s e r v e c l o s e r a t t e n t i o n . While the government has continued to o f f e r a l a r g e r v a r i e t y of l o t t e r y t i c k e t s to a b r o a d e r market (Canadian l o t t e r y t i c k e t s are now marketed i n the United S t a t e s ) , i t has p a r t i a l l y j u s t i f i e d i t s actions on the basis t h a t the revenues which were generated were to be used f o r the b e n e f i t of communities and n o n - p r o f i t organizations. However, an e x a m i n a t i o n of the Government of B r i t i s h Columbia's Public Accounts f o r the f i s c a l years ended 1982 through 1985 reveals that, although revenues from the sale of l o t t e r y t i c k e t s are i n c r e a s i n g each year and n o n - p r o f i t and community groups have received increased amounts through the L o t t e r y Fund, each year a s i g n i f i a n t amount has been l e f t i n the fund (Table 4:1). I f sales are being encouraged on the basis that such groups are to b e n e f i t from the proceeds of the sale of l o t t e r y t i c k e t s , should a l l the revenue not, i n fact, be disbursed to them? In May 1 987, the government f i n a l l y i n s t a l l e d 103 s l o t machines on board two B r i t i s h Columbia Steamship vessels. Although a spokesperson for non-profit groups stated that the proceeds of the machines had been promised to c h a r i t y , according to the B r i t i s h Columbia Steamship general manager, revenues generated by the s l o t machines would be used to reduce the steamship company's d e f i c i t and not be disbursed to charitable organizations (Vancouver Sun, May 6, 198 7). 116 TABLE 4:1 Summary of Revenues, Expenditures and L o t t e r y Fund Balances F i s c a l Year Ended 1982 1983 1984 1985 Revenue from L o t t e r y T i c k e t Sales $25,913,997 28,137,960 60,021,992 84,493,299 L o t t e r y Fund Grants 16,132,831 28,658,227 56,761,841 49,175,942 Other Expenditures 1,461,355 1,565,627 1,729,605 3,025,350 Balance $29,999,659 27,913,765 29,444,311 61,736,318 * * Balance of L o t t e r y Fund at March 31, 1985 in c l u d e s $13,282,332 recoverable advance to the B.C. L o t t e r y Corporation Source: Government of B r i t i s h Columbia P u b l i c Accounts, 1982-1985. Presently, the government is moving to expand both i t s direct involvement i n the gaming indust r y and increase i t s revenues through such i n d i r e c t means as s e t t i n g higher l i c e n c i n g fees f o r n o n - p r o f i t o r g a n i z a t i o n s and the c r e a t i o n of monopolies on such goods as bingo paper. The s i t u a t i o n i s f u r t h e r complicated by the i n t e r e s t of p r i v a t e entrepreneurs i n the gaming industry. What e f f e c t w i l l these encroachments upon an area previously dominated by non-profit organizations have on t h e i r a b i l i t y to meet f u n d i n g s h o r t f a l l s t h r o u g h conducting gaming a c t i v i t e s ? 117 Gambling has always been a c o n t r o v e r s i a l and contentious issue, with many of the arguments based on moral sentiments. However, a rec e n t a r t i c l e i n the Vancouver Sun (March 26, 1987) touched on what are, perhaps, several of the paramount issues surrounding what is c u r r e n t l y happening v i s - a - v i s the expansion of the gaming industy i n B r i t i s h Columbia. The a r t i c l e pointed out that, to date, the government has f a i l e d to make a coherent statement regarding i t s p o l i c y v i s - a - v i s the expansion of l e g a l i z e d gambling. In a d d i t i o n , steps are being taken to expand the op p o r t u n i t i e s to gamble (e.g. through i n s t a l l i n g gambling f a c i l i t i e s on f e r r i e s ) i n the absence of any public debate. Although, u l t i m a t e l y , c i t i z e n s may choose to have expanded o p p o r t u n i t i e s to gamble, i t i s the c i t i z e n s who should choose - but only a f t e r considering a l l the r a m i f i c a t i o n s of such a development, not only to non-p r o f i t o r g a n i z a t i o n s , but also to s o c i e t y g e n e r a l l y . F i n a l l y , f o r those n o n - p r o f i t o r g a n i z a t i o n s t h a t have r e c e n t l y turned to, or that are already h e a v i l y dependent upon gaming to generate funding s h o r t f a l l s , are there moral issues t h a t should be considered? For example, l o t t e r i e s and bingo have been ra t e d as regressive (on a scale which runs from 'highly r e g r e s s i v e ' to 'progressive' (see, Suits, 1979). I f a s i g n i f i c a n t number of purchasers of l o t t e r y t i c k e t s or bingo players are persons on l i m i t e d incomes, and n o n - p r o f i t 118 o r g a n i z a t i o n s are being f o r c e d to r e l y upon funds from these sources as a r e s u l t of government funding cuts, what l o n g -term e f f e c t s w i l l t h i s have on n o n - p r o f i t agencies? Are the d i s a d v a n t a g e d , i n r e a l i t y , p a y i n g f o r t h e i r own s o c i a l welfare programs? Is ' p r i v a t i z a t i o n 1 f o r c i n g some n o n - p r o f i t s o c i a l s e r v i c e groups to depend, f o r funding, on many of those individuals whom they serve? In order to provide an e m p i r i c a l basis f o r a discussion of these and other issues, we turn now to the research and the f i n d i n g s . 119 NOTES A discussion of the l e g a l i t y and c o n s t i t u t i o n a l i t y of thi s c o n t r a c t between the l e v e l s of government has been discussed elsewhere (see, Osborne and Campbell, 1986). I t was p r e d i c t e d t h a t the new a r r a n g e m e n t would s i g n i f i c a n t l y r e d u c e B r i t i s h Columbia's s h a r e of the amount due t o the f e d e r a l government under the p r o v i n c i a l / f e d e r a l agreement over j u r i s d i c t i o n ( Vancouver  Sun, A p r i l 15, 1985). In B r i t i s h Columbia, not a l l funds are channelled i n t o the L o t t e r y Fund Account f o r disbursement to c h a r i t a b l e o r g a n i z a t i o n s . Since 1981, the e n t i r e proceeds from one p a r t i c u l a r l o t t e r y game - Lo t t o 6/4 9 (renamed B.C. Expo Lotto) - have been earmarked for eliminating the Expo '8 6 d e f i c i t . L o t t o 6/49 has proved so popular t h a t i t has garnered a major portion of the lott e r y market. As Lotto 6/4 9 revenues incre a s e d , sales of nearly a l l the other l o t t e r y t i c k e t s d e c r e a s e d ( V a n c o u v e r Sun, A p r i l 15, 1986 ). The o r g a n i z a t i o n t h a t conducted t h i s p a r t i c u l a r session i s a n o n - p r o f i t s o c i e t y based i n New We s t m i n s t e r . However, many other groups conducted similar sessions in other bingo parlours. I t i s not known whether these other sessions have been as f i n a n c i a l l y s u c c e s s f u l . P u l l tabs are a highly regressive l o t t e r y game whereby, i f the i n d i v i d u a l p u l l s the various tabs on the card and uncovers matching symbols, he or she wins. 120 Chapter V METHOD The Research As a r e s u l t of ' p r i v a t i z a t i o n 1 , many n o n - p r o f i t o r g a n i z a t i o n s have experienced a r e d u c t i o n i n , or complete e l i m i n a t i o n of, government funding. The empirical research component of the thesis c o n s t i t u t e d an attempt to a s c e r t a i n whether n o n - p r o f i t s o c i a l s e r v i c e o r g a n i z a t i o n s have t r i e d to counterbalance such budget d e f i c i t s with funds generated by conducting gambling a c t i v i t e s . G i v e n the e x p l o r a t o r y n a t u r e of the r e s e a r c h , s p e c i f i c hypotheses were not tested. Rather, the research was guided by the f o l l o w i n g questions. Has there been a change agencies r a i s i n g money gambling a c t i v i t i e s such in the types of non-profit through the conduct of as bingo and casinos? 2. Were more social welfare programs being funded i n this manner at the end of December, 1986 than was the case i n December, 1982? 3. Have the agencies who received lottery licenses in 1986 experienced reductions i n funding r e c e i v e d from government or other sources? 121 4. Have any f u n d i n g r e d u c t i o n s been a d e q u a t e l y counterbalanced by revenues gained by conducting gambling a c t i v i t i e s ? 6. What e f f e c t , i f any, has such f u n d - r a i s i n g e f f o r t s had on s t a f f , and the l e v e l or type of s e r v i c e which the agency offers? The Subjects I n i t i a l l y , the f o l l o w i n g d e f i n i t i o n s and r a t i o n a l e were employed to s e l e c t n o n - p r o f i t s o c i a l welfare agencies f o r research purposes. Non-profit agencies included in the study would be those which were r e g i s t e r e d under the S o c i e t y Act (R.S.B.C., 1 979, c. 3 90 ). However, s i n c e n o n - p r o f i t s o c i e t i e s may provide a v a r i e t y of s e r v i c e s or serve various f u n c t i o n s , which may or may not be considered s o c i a l welfare s e r v i c e s , a f u r t h e r s e t of c r i t e r i a f o r s e l e c t i o n was employed. B e g i n n i n g i n 1983, the P r o v i n c i a l government d i r e c t l y , (through f i s c a l r e s t r a i n t s ) or i n d i r e c t l y , (through manpower reductions) reduced s e r v i c e s or discontinued programs. The f o l l o w i n g were d i r e c t l y a f f e c t e d : the Family Support Worker Program, M e n t a l R e t a r d a t i o n C o - o r d i n a t o r s , C h i l d Abuse Assessment Teams, Transition Houses for Battered Women, Post Partem Counsellors, C h i l d Care Workers, the P r o v i n c i a l I n -122 s e r v i c e Resource Team, Public Health C l i n i c s , L e g a l Aid Programs, P l a n n e d P a r e n t h o o d , and the Women's H e a l t h C o l l e c t i v e . In a d d i t i o n , b e n e f i t s a v a i l a b l e under the GAIN program were reduced and the health care budget was increased by only two percent, during a time when the i n f l a t i o n rate was five percent (Magnusson et a l , 1984; B.C.G.E.U., 1986). C o n s e q u e n t l y , i f the n o n - p r o f i t s e c t o r was u t i l i z i n g a l t e r n a t e f u n d i n g t o p r o v i d e those s e r v i c e s p r e v i o u s l y provided by government, there should be an increase i n the number of n o n - p r o f i t agencies that d e l i v e r s e r v i c e s i n any of the areas o u t l i n e d above. Therefore, any n o n - p r o f i t agency d e l i v e r i n g s e r v i c e s to c h i l d r e n , youth, handicapped, seniors or low income groups were considered to be s o c i a l welfare agencies f o r the purpose of t h i s research. I t i s worth mentioning t h a t the B.C. Gaming C o n t r o l Branch refused to p a r t i c i p a t e i n the pr o j e c t . Consequently, the f o l l o w i n g o r i g i n a l research design had to be amended. Every n o n - p r o f i t agency th a t conducts bingos or casinos i n B r i t i s h Columbia is required to obtain a licence from the B.C. Gaming C o n t r o l Branch. The l i c e n c e form contains a s e c t i o n which requests i n f o r m a t i o n regarding the c h a r i t a b l e nature of the agency and, s p e c i f i c a l l y , the types of s e r v i c e s which are provided. By examining t h i s s e c t i o n of the l i c e n c e form, i t would be p o s s i b l e t o c a t e g o r i z e a g e n c i e s i n t o d i f f e r e n t 123 types; i.e., agencies. sports clubs, s e r v i c e clubs or s o c i a l s e r v i c e This information would have enabled the researcher to conduct a comparative an a l y s i s of the types of agencies t h a t u t i l i z e d gambling revenues to fund t h e i r a c t i v i t i e s i n both 1982 and 1986. Therefore, a l e t t e r (Appendix 1) was sent to the D i r e c t o r of the B.C. Gaming C o n t r o l Branch to request the Branch's assistance i n providing t h i s i n f o r m a t i o n . However, the Branch refused to both provide the i n f o r m a t i o n and to a l l o w the r e s e a r c h e r a c c e s s to the f i l e s i n o r d e r to p e r s o n a l l y c o m p i l e the i n f o r m a t i o n . As a r e s u l t the following procedures were followed. Procedures Locating the Sample In an attempt to l o c a t e those s o c i a l s e r v i c e agencies that use gambling r e v e n u e s t o supplement t h e i r budgets, the Directories of Services for both Vancouver and Burnaby, were c u l l e d . From the d e s c r i p t i o n of the s e r v i c e provided, those agencies t h a t o f f e r e d d i r e c t s e r v i c e s to c h i l d r e n , youths, handicapped, seniors or low income groups were i d e n t i f i e d . R e l i g i o u s groups, h o s p i t a l s , o r g a n i z a t i o n s to promote research, t h r i f t stores, housing pr o j e c t s or tenants' groups, human p o t e n t i a l development orga n i z a t i o n s , p r i m a r i l y s o c i a l and r e c r e a t i o n a l groups, a r t s , t r a v e l , tourism or s e l f - h e l p groups were not included. A card f i l e of 225 agencies was 124 compiled. Subsequently"/ the researcher (and an assistant) telephoned each agency. The nature of the study was explained to the Execu t i v e D i r e c t o r or other appropriate i n d i v i d u a l , and he or she was asked i f the agency was i n v o l v e d i n hosting bingo or casino events, whether the agency r e c e i v e d money from the L o t t e r y Fund, or i f r a f f l e s were u t i l i z e d as a means to rais e funds. I f the i n d i v i d u a l responded i n the a f f i r m a t i v e , he or she was asked to p a r t i c i p a t e by completing a questionnaire. U t i l i z i n g t h i s method, 101 a g e n c i e s out of 225 were i d e n t i f i e d as r e c e i v i n g r e v e n u e s , e i t h e r d i r e c t l y or i n d i r e c t l y , from various gambling a c t i v i t i e s . Because of the method employed to l o c a t e the agencies, the f i n a l sample i s not comprehensive and i s r e s t r i c t e d to Vancouver and the surrounding areas. Consequently, no con s i d e r a t i o n is given to the extent to which s o c i a l s e r v i c e s i n other areas of the province are i n v o l v e d i n conducting gaming a c t i v i t i e s . An e i g h t page questionnaire (Appendix 2) was designed to gather i n f o r m a t i o n regarding: (i) the si z e of the agencies; ( i i ) t h e i r sources of funding; ( i i i ) r e d u c t i o n s i n budgets since 1983; (iv) increases i n se r v i c e since 1983; (v) why the agency began r a i s i n g money through hosting bingo or casino events; (vi) the persons i n v o l v e d i n agency f u n d - r a i s i n g ; and 125 ( v i i ) any e f f e c t s t h a t the holding of gaming events may have had on both the s t a f f and the l e v e l s of s e r v i c e s which the agency offered. The l i m i t e d time a v a i l a b l e f o r the completion of the research precluded any extensive p r e - t e s t i n g of the questionnaire. However, i t was circulated among several individuals employed i n managerial positions w i t h i n n o n - p r o f i t o r g a n i z a t i o n s and, on the basis of t h e i r suggestions, some minor modifications to the questionnaire were made. The q u e s t i o n n a i r e g u a r a n t e e d b o t h c o n f i d e n t i a l i t y and anonymity. Consequently, agency personnel who completed the questionnaire could do so without i d e n t i f y i n g e i t h e r the agency or themselves. Approximately three weeks a f t e r the questionnaires were mailed, those agencies that had agreed to p a r t i c i p a t e , but who had not responded, were c o n t a c t e d by telephone and asked whether any problems or d i f f i c u l t i e s had been e n c o u n t e r e d i n t h e i r a t t e m p t s t o c o m p l e t e the questionnaire. This helped to increase the response r a t e . Of the 225 agencies t h a t were p o l l e d by telephone, the p e r s o n n e l i n 101 a g e n c i e s i n d i c a t e d t h a t t h e i r agency r e c e i v e d money d i r e c t l y from gaming a c t i v i t i e s , l o t t e r y f unds, r a f f l e s , or i n d i r e c t l y , from o t h e r groups t h a t conducted such events. Questionnaires were sent to 98 of these agencies, as personnel i n three d e c l i n e d to p a r t i c i p a t e 126 b e f o r e s e e i n g the q u e s t i o n n a i r e . F o r two of the t h r e e respondents who d e c l i n e d , lack of time and s t a f f were c i t e d as the reasons f o r a r e f u s a l to p a r t i c i p a t e . Table 5:1 provides a breakdown of the questionnaires t h a t were returned. S i x t y - t h r e e questionnaires were returned (64 percent response r a t e ) , and of these, 35 i n d i c a t e d t h a t the agency was d i r e c t l y i n v o l v e d i n conducting bingo or casino events. Five i n d i c a t e d t h a t the agency r e c e i v e d money from the conduct of r a f f l e s , the L o t t e r y Fund or the Senior's L o t t e r y , and s i x i n d i c a t e d t h a t the agency had submitted an application to conduct bingo or casino events and would begin once their application had been approved. Eight of the 63 completed questionnaires were discarded f o r the purposes of t h i s study, p r i m a r i l y because the agencies had either received in-kind donations or the amounts involved were i n s i g n i f i c a n t . Eight incompleted questionnaires were returned with explanations. Agency staff refused to complete them either because of the time required, or because they (or the agency board) were u n w i l l i n g to disclose the l e v e l of i n f o r m a t i o n requested. One questionnaire, t h a t i n d i c a t e d t h a t the agency conducted casino events, was s p o i l t because i t was incomplete. Of the 63 questionnaires r e c e i v e d , only 4 6 were considered r e l e v a n t f o r the purposes of t h i s study. 127 TABLE 5:1 A Breakdown of Those Questionnaires That Were Returned Number of agencies d i r e c t l y i n v o l v e d i n conducting casinos or bingos Number of agencies which have a p p l i e d f o r bingo or casino l i c e n c e s Number of agencies which r a i s e money through r a f f l e s , or receive money from e i t h e r the Senior's L o t t e r y or L o t t e r y Fund Questionnaires discarded Number of agencies which returned uncompleted qu e s t i o n n a i r e s Questionnaires s p o i l t n = 63 Procedural D i f f i c u l t i e s and Other Problems The B.C. Gaming C o n t r o l Branch's r e f u s a l to as s i s t i n the research was announced a f t e r a p r o t r a c t e d period of time. Consequently, the a l t e r n a t i v e s t r a t e g y was h a s t i l y devised and subject to extreme time c o n s t r a i n t s . Some of the a g e n c i e s found the q u e s t i o n n a i r e onerous, e s p e c i a l l y since i t a r r i v e d during a period when budgetting 35 6 5 8 8 1 128 for the next f i s c a l year was a major concern. I t may be that the period from January to A p r i l i s not the optimum time during which to d i s t r i b u t e questionnaires. Given t h a t agency s t a f f are i n v o l v e d i n budget submissions and negotiations, i t is reasonable to assume t h a t questionnaires would have a lower p r i o r i t y than might otherwise be the case. F o r many i n d i v i d u a l s , g a m b l i n g g e n e r a l l y r e m a i n s a c o n t r o v e r s i a l t o p i c . I n a d d i t i o n , as a r e s u l t of the a p p a r e n t i n s t a b i l i t y w i t h i n the gaming i n d u s t r y , agency personnel may have f e l t the need to be guarded i n t h e i r communications regarding the agency and i t s involvement i n gambl i n g a c t i v i t i e s . In any e v e n t , some a g e n c i e s were r e l u c t a n t to disclose the l e v e l of i n f o r m a t i o n which was requested. Possibly, i t would have been h e l p f u l to undertake personal i n t e r v i e w s i n order to supplement the data gathered through questionnaires. 129 Chapter VI RESULTS The f o l l o w i n g i s a compilation and analysis of the data that was gathered from those agencies which p a r t i c i p a t e d in the s u r v e y by c o m p l e t i n g and r e t u r n i n g the q u e s t i o n n a i r e . Because the agencies were so diverse, i t was not possible to construct a typology. However, a description of the agencies and t h e i r programs and s e r v i c e s i s provided. The extent to which the n o n - p r o f i t s o c i a l s e r v i c e o r g a n i z a t i o n s in the sample are i n v o l v e d in gaming, and the reasons they became inv o l v e d , are examined. A discussion of the extent to which an involvement i n gaming has had an impact upon both the agencies and t h e i r s t a f f f o l l o w s . The Agencies The completed questionnaires from 46 agencies i n d i c a t e t h a t the n o n - p r o f i t s e c t o r i s diverse. As shown i n Table 6:1, t h i r t y - f i v e agencies provided between four and s i x s e r v i c e s or programs, and served a v a r i e t y of c l i e n t populations. T h i s would seem to i n d i c a t e t h a t a g e n c i e s were not ' s p e c i a l i z i n g ' . This development may r e s u l t from e i t h e r agency personnel attempting to meet perceived community needs or the a v a i l a b i l i t y of funding f o r s p e c i f i c programs. The m u l t i - t a r g e t group a g e n c i e s d e l i v e r a wide v a r i e t y of programs. For example, one agency provided counselling f o r f a m i l i e s or i n d i v i d u a l s ; a c r i s i s l i n e and suicide follow-up 130 s e r v i c e s to the g e n e r a l p o p u l a t i o n ; m e als-on-wheels to seniors and s h u t - i n s ; a t h e r a p e u t i c work program f o r the p s y c h i a t r i c a l l y disabled; a volunteer bureau serving the general population and other agencies; and, food aid f o r the low-income. Although four agencies began operating i n the 1930's or b e f o r e , as T able 6:2 i n d i c a t e s , only one agency began operating after 19 84. While eleven agencies were established between 1961 and 1971, only seven began during the 1972-75 period, when the N.D.P. formed the government. The fact that only one agency has been established since 1983 would seem to suggest that the establishment of agencies which are semi-independent of government has been curtailed by the restraint measures of 1983. However, there may have been an increase i n the number of n o n - p r o f i t s o c i e t i e s established s o l e l y to provide s e r v i c e s under pu r c h a s e - o f - s e r v i c e c o n t r a c t s . For example, i f an agency was established p r i m a r i l y to bid on a government purchase - o f - s e r v i c e c o n t r a c t and was subsequently s u c c e s s f u l i n i t s bid, i t i s l i k e l y that such an agency would have no need to fund-raise. Consequently, such agencies would not appear i n the sample. 131 TABLE 6:1 The Groups Which Received Services and the Number of Programs or Services Provided by Agencies Target Groups Psychiat. Multi-Youth Mentally Physical. Disabled Chem. Dep. Native/ Learning Target Women Children Elderly Handic. Disabled Adults Adults Ethnic Disabled Family Groups Number of programs/ services provided by agency 1 - 3 4 - 6 7 - 9 10 - 12 13 - 15 Over 15 5 2 1 1 2 1 2 1 2 5 2 1 5 TABLE 6:2 The Years i n Which the Agencies Were E s t a b l i s h e d Pre 1950 6 1951 - 1960 6 1961 - 1971 11 1972 - 1975 7 1976 - 1980 11 1981 - 1983 4 1984 1 1985 0 1986 0 n = 46 As the data i n Table 6:3 i n d i c a t e , the a g e n c i e s v a r i e d i n s i z e from the very s m a l l , w i t h no f u l l - t i m e s t a f f , to the very l a r g e , w i t h between 100 and 199 f u l l - t i m e s t a f f . Of the 44 agencies that provided infor m a t i o n regarding the numbers of f u l l - t i m e , part-time or volunteer s t a f f , the l a r g e s t group of a g e n c i e s (20) employed between one and nin e f u l l - t i m e s t a f f . E i g h t agencies employed between 10 and 19 f u l l - t i m e s t a f f , ten employed between 20 and 34 f u l l - t i m e s t a f f , and two employed between 35 and 49 f u l l - t i m e s t a f f . Three agencies employed between 100 and 299 f u l l - t i m e s t a f f . 133 TABLE 6:3 Numbers of Full-Time, Part-Time and Voluntary Personnel Employed by Agencies Number of S t a f f F u l l Time Part Time Volunteer 0 2 8 4 1 - 9 20 25 6 10 - 19 8 3 9 20 - 34 10 6 4 35 - 49 2 3 50 - 74 2 4 75 - 99 4 100 - 299 3 1 6 500 1 1000 1 Varies 1 n = 46 M u l t i p l e responses permitted Forty-one agencies reported serving approximately 349,440 i n d i v i d u a l s during t h e i r l a s t accounting year. The combined budgets f o r a l l the 46 agencies during the f i s c a l year 1985-86, or the calendar year 1986, totalled $36,941,199. Twenty-seven of the 46 agencies had budgets under $449,000 while 19 had budgets over $500,000 (Table 6:4). 134 TABLE 6:4 The Size of Agency Budgets Under $100,000 6 100,000 - 199,999 7 200,000 - 299,999 7 300,000 - 399,999 5 400,000 - 499,999 2 500,000 - 599,999 0 600,000 - 699,999 4 700,000 - 799,999 0 800,000 - 899,999 0 900,000 - 999,999 1 1 Million 1.5 M i l l i o n 6 1.6 M i l l i o n - 2 M i l l i o n 4 Over 2 M i l l i o n 4 n = 46 Of the 46 a g e n c i e s , o n l y 12 r e c e i v e d 70 p e r c e n t or more of t h e i r income from one source and only 25 agencies received over 51 percent of t h e i r budget from one source (Table 6:5). Twenty-one a g e n c i e s were i n v o l v e d i n p u r c h a s e - o f - s e r v i c e c o n t r a c t s and 19 received p r o v i n c i a l government core funding. When an agency has a v a r i e t y of funding sources, there i s of cour s e , l e s s r e l i a n c e on any one source. However, i t may r e q u i r e more s t a f f time to c u l t i v a t e and m a i n t a i n those sources. 135 TABLE 6:5 Sources of Agency Funding  Percent of Budget  Source Under 1 1-10 11-20 21-30 31-40 41-50 51-60 61-70 71-80 81-90 91-100 Prov. gov. purch. of services 5 4 1 2 1 2 Prov. gov. core funding 1 6 2 2 2 2 1 Federal gov. purch. of services 1 8 3 2 1 Federal gov. core fund. 1 2 2 1 1 Municipal grants 3 16 3 3 1 1 Philanthropic trusts 3 8 1 1 Client fees 3 17 4 3 1 Casino or bingo 9 15 6 3 .1 Lottery fund 1 3 Senior's lottery 4 Raffles 4 4 1 Donations from indiv. or businesses 16 19 3 1 1 Service clubs 14 3 1 1 Agency generated -rents, membersh. etc. 6 4 2 1 2 Income from other agencies or organizations 3 6 4 1 Miscellaneous -interest income, etc. 3 8 1 United way 8 4 6 Fed. government employment programs 1 3 1 1 1 Other fund raising 1 10 3 3 1 In kind donations 1 n = 46 Multiple responses permitted Gaming and the Non-profit Sector T h i r t y - f i v e a g e n c i e s r e p o r t e d being d i r e c t l y i n v o l v e d i n e i t h e r conducting bingos or casinos, or both. In a d d i t i o n , some of these agencies hold r a f f l e s to r a i s e money, or s e l l p r o v i n c i a l government l o t t e r y t i c k e t s ( f o r which they receive a commission of f i v e cents on the d o l l a r ) . Although r a f f l e s have l o n g been a source of revenue, 18 a g e n c i e s began c o n d u c t i n g c a s i n o s from 1983 onwards (Table 6:6). During t h a t same p e r i o d , 24 a g e n c i e s a l s o became i n v o l v e d i n conducting bingos. TABLE 6:6 The Years i n Which Agencies Began Conducting Gambling Events in Order to Raise Money Sale of L o t t e r y Casino Bingo R a f f l e s T i c k e t s Pre 1960 4 1961 - 1965 1966 - 1970 1 1971 - 1975 5 2 1976 - 1980 3 2 3 3 1981 1 1982 2 1 1 1983 4 2 3 1984 2 3 2 1985 7 10 1 1986 9 7 n = 35 M u l t i p l e responses permitted Agencies that began conducting casino and/or bingo events i n 1982 or before, reported that they had done so because they: 137 ( i ) wished to broaden t h e i r f u n d i n g base; ( i i ) c o u l d not obtain funding from any other source, ( i i i ) wished to augment c u r r e n t f u n d i n g ; o r , ( i v ) wished to become more s e l f -supporting (Table 6:7). W h i l e those a g e n c i e s t h a t began c o n d u c t i n g c a s i n o and/or bingo events during 1983 and a f t e r c i t e d some of these same re a s o n s , none began o p e r a t i o n s i n o r d e r to broaden t h e i r f u n d i n g base (Table 6:7). Rather, they r e p o r t e d t h a t : ( i ) they had l o s t a l l or p a r t of t h e i r p r o v i n c i a l or p r i v a t e funding; ( i i ) they had i d e n t i f i e d the need f o r new s e r v i c e s but had been r e f u s e d government f u n d i n g ; o r , ( i i i ) the agencies* core f u n d i n g had not i n c r e a s e d to keep up w i t h i n f l a t i o n . The 35 a g e n c i e s d i r e c t l y i n v o l v e d i n c o n d u c t i n g bingo and casino events garnered anywhere from below one percent to as much as 92 percent of t h e i r t o t a l annual budget f o r f i s c a l year 1985-86 (or calendar year 1986) from t h i s source. When asked what e f f e c t l o s i n g t h i s source of revenue would have on the agency, o n l y f o u r of the 31 a g e n c i e s t h a t responded, i n d i c a t e d that such a development would have no s i g n i f i c a n t impact on the agency. The bingo and casino events conducted by these agencies c o n t r i b u t e d l e s s then one percent to t h e i r t o t a l budgets. 138 TABLE 6:7 The Reasons Why Agencies Began Conducting Casino or Bingo Activities Agency Agency Agency retained designed core Agency Agency levels new funding not Agency could lost lost part of govt. program(s), increasing Agency To not obtain part or or a l l funding but was commensurate wished to broaden funding a l l of i t s of i t s but wished refused with become funding from any provincial private to augment government increases in more self-base other source funding funding funds funding inflation supporting Those who began during 1 1 4 1 1982, or before Those who began during 13 9 2 9 11 8 2 1983, or after n = 35 Multiple responses permitted However, f o r those agencies whose gaming a c t i v i t i e s generated over one percent of t h e i r t o t a l annual budget, such revenues were c o n s i d e r e d v i t a l . Agency p e r s o n n e l expressed t h e i r p e r c e p t i o n s of the impact t h a t l o s i n g such revenues would have on the agency. The respondents used words such as ' p r o b l e m a t i c 1 , ' d i s a s t r o u s ' and 'hardship' to d e s c r i b e the e f f e c t that l o s i n g gaming revenues would have on the agency. From t h i s i n f o r m a t i o n , i t i s apparent t h a t , even i n cases where revenues from gaming may have been s m a l l , the e x t r a funds were c r i t i c a l , and could make the d i f f e r e n c e between the agency continuing to operate or being forced to close. For example, an agency which generated 2.3 p e r c e n t of i t s revenues from gaming events described the e f f e c t s of l o s i n g such gaming revenues as " c a t a s t r o p h i c - r e s u l t i n g i n severe cutbacks i n s e r v i c e d e l i v e r y " . Two agencies, which generated 17 and 92 percent of t h e i r revenues through gaming, responded t h a t they would c l o s e i f they l o s t these funds. Table 6:8 i n d i c a t e s how agency personnel perceived the e f f e c t of l o s i n g gaming revenues. 140 TABLE 6:8 How Agency S t a f f Perceive the E f f e c t of Losing Gaming Revenues No s i g n i f i c a n t impact on agency 4 Would force agency to develop other methods of r a i s i n g funds 2 A reduction i n 'extra' money 2 A reduction i n core funding 1 A reduction i n s t a f f 3 A reduction i n services/programs 5 A reduction i n both s t a f f and programs 4 Hardship, d i s a s t r o u s , problematic 8 Agency would cl o s e 2 No response 4 n = 35 The questionnaire sought to determine what effect the loss of gaming r e v e n u e s would have on the a g e n c i e s , and the respondents provided subjective answers which may have been i n f l u e n c e d by a number of v a r i a b l e s . For example, the personnel of an agency which has a d i v e r s i f i e d source of funds may f e e l less dependent on any one source. There i s the l i k e l i h o o d that a loss of revenue from one source may be counterbalanced by increases i n another. The longer an agency has been i n v o l v e d i n f u n d - r a i s i n g of a p a r t i c u l a r type, the more the agency is l i k e l y to be dependent upon that 141 source. As the revenues become more p r e d i c t a b l e year a f t e r year, there i s a l i k e l i h o o d that they w i l l become an i n t e g r a l part of the agency budget. Agency p e r s o n n e l , who have a l r e a d y trimmed a l l e x c e s s expenditures from the budget, realize that there are no other economizing measures which can taken. In t h i s i nstance, a l l funds become c r u c i a l to the operation of the agency. In ad d i t i o n , agency personnel who have i n v e s t i g a t e d a l l other s o u r c e s of funds u n s u c c e s s f u l l y w i l l , perhaps, p e r c e i v e gaming as the o n l y means l e f t to p r o v i d e f o r agency operations. In a d d i t i o n , c e r t a i n s o c i a l s e r v i c e s may f a l l v i c t i m to s h i f t i n g p o l i t i c a l winds. For example, s p e c i a l i n t e r e s t groups, economic va r i a b l e s or press coverage of a particular problem may result in some services being favoured (and funded) over another, at any p a r t i c u l a r time. At the present time, personnel of agencies which do not provide services that are amenable to government purchase-of-service c o n t r a c t s may f e e l more u r g e n t about c u l t i v a t i n g and maintaining a l t e r n a t i v e sources of funding. S i x a g e n c i e s have a p p l i e d f o r e i t h e r bingo or c a s i n o l i c e n s e s , or both, and plan to commence conducting such a c t i v i t i e s sometime i n 1987. Three of the agencies reported t h a t , a l t h o u g h they had not e x p e r i e n c e d budget c u t s , government funding had not kept pace with i n f l a t i o n . I t was 142 hoped th a t f u n d - r a i s i n g , through gaming, would allow the agency to subsidize c u r r e n t programs i n order to maintain e x i s t i n g l e v e l s of s e r v i c e . One agency had l o s t part of i t s p r o v i n c i a l funding and hoped to make up the s h o r t f a l l i n order to retain one half-time staff person. This same agency has needed an a d d i t i o n a l f u l l - t i m e worker f o r three years. The two remaining agencies were planning to fund-raise only to augment current funding. A s u c c e s s f u l outcome was not c o n s i d e r e d c r u c i a l to m a i n t a i n i n g l e v e l s of s t a f f or s e r v i c e s . H a v i n g d e s c r i b e d the a g e n c i e s and t h e i r i n v o l v e m e n t i n gambling, we turn now to an analysis of t h e i r responses to the i s s u e s of f u n d i n g l e v e l s , s e r v i c e d e l i v e r y and the e f f e c t s of f u n d - r a i s i n g . Levels of Funding Of the 44 a g e n c i e s t h a t p r o v i d e d i n f o r m a t i o n r e g a r d i n g r e d u c t i o n s i n f u n d i n g which have o c c u r r e d s i n c e 1983, 23 r e p o r t e d having e x p e r i e n c e d r e d u c t i o n s from e i t h e r t h e i r government or p r i v a t e f u n d i n g s o u r c e s . Fourteen a g e n c i e s r e p o r t e d t h a t they had e x p e r i e n c e d a p a r t i a l decrease i n p r o v i n c i a l or f e d e r a l f u n d i n g s i n c e 1983. Of the 14, nine a g e n c i e s , which d e l i v e r e d s e r v i c e s to N a t i v e I n d i a n s , the e l d e r l y , p s y c h i a t r i c c l i e n t s , t h e p h y s i c a l l y o r d e v e l o p m e n t a l l y d i s a b l e d , c h i l d r e n and the g e n e r a l 143 population, had t h e i r budgets reduced by as l i t t l e as seven and as much as 70 percent. However, m u l t i - s e r v i c e agencies were p a r t i c u l a r l y hard h i t . Five m u l t i - s e r v i c e agencies l o s t between f i v e and 49 percent of t h e i r p r o v i n c i a l funding. In a d d i t i o n to the 14 agencies r e p o r t i n g a p a r t i a l d e c rease i n p r o v i n c i a l or f e d e r a l funding, four agencies, which d e l i v e r e d s e r v i c e s to Native Indians, the e l d e r l y , and the general population, reported l o s i n g 100 percent of t h e i r p r o v i n c i a l funding. In a d d i t i o n , f i v e a g e n c i e s r e p o r t e d e x p e r i e n c i n g a r e d u c t i o n i n funds received from various other non-governmental sources. Of the 44 agencies p r o v i d i n g i n f o r m a t i o n regarding decreases i n l e v e l s of funding since 1983, 21 reported that there had been no decrease. As the data i n Table 6:9 i n d i c a t e , s i x out of the 21 received no government funding. While one other agency r e c e i v e d no government f u n d i n g , p e r s o n n e l r e p o r t e d that agency income was not keeping pace w i t h i n f l a t i o n . Of the nine agencies that received core funding grants from the p r o v i n c i a l o r f e d e r a l governments, f o u r r e p o r t e d t h a t , a l t h o u g h t h e r e had been no decrease i n l e v e l s of f u n d i n g s i n c e 1983, t h e r e had been no i n c r e a s e commensurate w i t h r a t e s of i n f l a t i o n or demand f o r s e r v i c e s . S i x of the a g e n c i e s t h a t r e p o r t e d no decrease r e c e i v e d p u r c h a s e - o f -s e r v i c e c o n t r a c t s . Given such an arrangement, i t i s assumed 144 that, as s e r v i c e l e v e l s increased, agency income would a l s o increase p r o p o r t i o n a t e l y . TABLE 6:9 The Funding Arrangements of Those Agencies Reporting No Decreases i n Funding since 1983 Agencies that received no p r o v i n c i a l or f e d e r a l government funds 6 Agencies that received p r o v i n c i a l or f e d e r a l core funding 9 * Agencies f u l f i l l i n g purchase-of-service c o n t r a c t s 6 _____ * 4 agencies reported that, while there was no decrease, funding was not keeping pace with i n f l a t i o n or demand f o r s e r v i c e s . Levels of Service D e l i v e r y Agency personnel reported t h a t there had been an increase i n demand for service since 1983, and 41 out of 46 agencies were p r o v i d i n g i n c r e a s e d l e v e l s of s e r v i c e . These a g e n c i e s i n d i c a t e d t h a t l e v e l s of se r v i c e had increased anywhere from f i v e percent to 230 percent. In some instances, agencies accomplished the task of providing higher l e v e l s of service through the more e f f i c i e n t use of volunteers, by giving 145 c l i e n t s less time, or r e - d i s t r i b u t i n g the agency resources; f o r example, c u r t a i l i n g a r e c r e a t i o n program i n order to balance the budget. Impact of Fund-Raising on Agencies and S t a f f When an agency decides to become involved in any fund-raising venture, whether of a short-term or long-term nature, the d e c i s i o n may r e s u l t i n a v a r i e t y o f c o n s e q u e n c e s . Involvement i n f u n d - r a i s i n g may a f f e c t , e i t h e r p o s i t i v e l y or n e g a t i v e l y , the p r o d u c t i v i t y of employees, the l e v e l s or q u a l i t y of s e r v i c e s provided, or the types of s e r v i c e s which are provided. However, the impact of f u n d - r a i s i n g on the agency and s t a f f w i l l be tempered by a number of var i a b l e s ; namely, the size of the agency; who i s i n v o l v e d i n the fund-r a i s i n g ; how necessary i t i s to raise funds; the amount of revenue generated; and, the way i n which the revenue i s u t i l i z e d by the agency. In order to raise funds, an agency must have at i t s disposal the necessary human resources. In 34 out of the 35 agencies c u r r e n t l y conducting bingo or casinos, s t a f f are d i r e c t l y i n v o l v e d on a continuous basis (Table 6:10). Twenty-one agencies reported that members were involved in fund-raising, nine reported c l i e n t involvement, and 33 agencies r e p o r t e d i n v o l v i n g volunteers. Only four agencies r e p o r t e d using p r o f e s s i o n a l f u n d - r a i s e r s to conduct the gaming events. 146 If, for example, an agency employs few staff, and those staff must become and remain i n v o l v e d i n f u n d - r a i s i n g , i n a d d i t i o n to f u l f i l l i n g t h e i r r e g u l a r duties, e v e n t u a l l y e i t h e r l e v e l s of d i r e c t s e r v i c e w i l l be a f f e c t e d or the agency w i l l s u f f e r from high l e v e l s of 'burn out' and increased s t a f f turnover. As i n d i c a t e d i n Table 6:11, 24 agencies report e d t h a t the c o n d u c t of b ingos or c a s i n o s had r e s u l t e d i n i n c r e a s e d workloads f o r s t a f f . One agency reported t h a t f u n d - r a i s i n g had also increased the workloads of personnel not d i r e c t l y i n v o l v e d i n the e n t e r p r i s e , but who had r e s p o n s i b i l i t y f o r the a s s o c i a t e d a d m i n i s t r a t i o n and a c c o u n t i n g t a s k s . In a d d i t i o n , 11 a g e n c i e s r e p o r t e d t h a t s t a f f t i m e f o r the d e l i v e r y of d i r e c t s e r v i c e s had been reduced. In those agencies with l a r g e r s t a f f complements or volunteer pools to draw from, the amount of time i n d i v i d u a l s t a f f are i n v o l v e d i n f u n d - r a i s i n g a c t i v i t i e s may be r e d u c e d s u b s t a n t i a l l y . Therefore, the impact of f u n d - r a i s i n g on the agency, the staff or programs may be minimal. Also, on the p o s i t i v e side, f u n d - r a i s i n g may serve as a mechanism for bringing staff, members, clients and volunteers t o g e t h e r i n the p u r s u i t of a common g o a l . In a d d i t i o n , bringing individuals together to work toward a goal may serve to strengthen t h e i r commitment to both one another and the goals of the agency. 147 TABLE 6:10 I n d i v i d u a l s Involved i n Agency Fund-Raising Number of Agencies S t a f f Members C l i e n t s Volunteers P r o f e s s i o n a l f u n d r a i s e r s 34 21 9 33 4 n = 35 M u l t i p l e responses permitted The revenue generated through f u n d - r a i s i n g may be used f o r a v a r i e t y of purposes; namely, to supplement core funding; to reduce the agency d e f i c i t ; purchase l a n d , b u i l d i n g s or equipment; h i r e a d d i t i o n a l s t a f f ; p r o v i d e f o r s a l a r y i n c r e a s e s ; and to develop and e v a l u a t e new programs. In those a g e n c i e s where f u n d - r a i s i n g e f f o r t s are a b s o l u t e l y n e c e s s a r y to the c o n t i n u e d e x i s t e n c e of the agency, fund-r a i s i n g may not be viewed i n a p o s i t i v e manner. I t may, because of i t s very n e c e s s i t y , be considered a negative and onerous e n t e r p r i s e . F i v e a g e n c i e s r e p o r t e d t h a t t h e r e had been a d e c l i n e i n s t a f f morale as a r e s u l t of the involvement i n f u n d - r a i s i n g . Table 6:11 s e t s out the v a r i o u s ways i n which the s t a f f of the a g e n c i e s have been a f f e c t e d , both d i r e c t l y and i n d i r e c t l y . 148 TABLE 6:11 The E f f e c t of Fund-raising on the S t a f f of the Agencies Number of Agencies S t a f f hours i n v o l v e d i n d i r e c t s e r v i c e i s reduced because of s t a f f involvement i n f u n d r a i s i n g 11 A d e c l i n e i n s t a f f morale 5 An improvement i n s t a f f morale 9 Increased workloads f o r s t a f f due to the d i r e c t or i n d i r e c t involvement i n f u n d r a i s i n g 24 A d d i t i o n a l s t a f f have been h i r e d w i t h revenues generated through f u n d r a i s i n g 11 No response 4 n = 35 M u l t i p l e responses permitted Some a g e n c i e s r e p o r t e d t h a t f u n d - r a i s i n g was a b s o l u t e l y n e c e s s a r y to merely s u s t a i n s t a f f and programs a t c u r r e n t l e v e l s , r a t h e r than a l l o w i n g them to e i t h e r expand s t a f f or s e r v i c e s or generate a f i n a n c i a l surplus. For example, as shown i n Table 6:12, nine agencies reported that l e v e l s of f u n d i n g had not changed, s i n c e a d d i t i o n a l income o n l y replaced other funding cuts. For two agencies, f u n d - r a i s i n g had not g e n e r a t e d s u f f i c i e n t revenues to c o u n t e r b a l a n c e cutbacks i n p r o v i n c i a l funding. One agency used the revenues generated through f u n d - r a i s i n g to supplement the agency's 149 requirements. Three agencies reported using the a d d i t i o n a l revenues to reduce t h e i r d e f i c i t . F und-raising had more p o s i t i v e b e n e f i t s f o r other agencies. Twelve r e p o r t e d t h a t i n c r e a s e d revenues had a l l o w e d the agency s t a f f to develop new programs (Table 6:12) and eight agencies had used the revenues to mount and evaluate short term programs. One agency was able to increase both s a l a r i e s and s e r v i c e s , w h i l e another used the funds f o r c a p i t a l expenditures. In summary, the n o n - p r o f i t s o c i a l s e r v i c e a g e n c i e s which p a r t i c i p a t e d i n t h i s study were d i v e r s e , both i n s i z e and the types of programs and s e r v i c e s which they o f f e r e d . Although the study was s m a l l and p r e l i m i n a r y i n nature, the r e s u l t s i n d i c a t e t h a t , as a r e s u l t of the i m p l e m e n t a t i o n o f ' p r i v a t i z a t i o n ' measures, n o n - p r o f i t s o c i a l s e r v i c e agencies are t u r n i n g to gaming i n order to r a i s e funds. The B.C. Gaming Con t r o l Branch refused to p a r t i c i p a t e i n the research p r o j e c t . Without being able to o b t a i n access to the Branch f i l e s , i t was i m p o s s i b l e to conduct a c o m p a r a t i v e a n a l y s i s of those a g e n c i e s which were c o n d u c t i n g gaming events i n 1982 and 1986. T h e r e f o r e , i t was i m p o s s i b l e to draw any f i r m c o n c l u s i o n s as to whether, over the y e a r s , t h e r e has been a change i n the t y p e s o f n o n - p r o f i t 150 o r g a n i z a t i o n s r a i s i n g money through the conduct of gambling a c t i v i t i e s . TABLE 6:12 The U t i l i z a t i o n of Those Revenues Generated through Conducting Gaming A c t i v i t i e s A d d i t i o n a l revenues have allowed s t a f f to develop new programs 12 A d d i t i o n a l revenues have allowed s t a f f to mount and evaluate s h o r t -term programs 8 Levels of s e r v i c e have not changed because a d d i t i o n a l revenues replaced other funding cuts 9 A d d i t i o n a l revenues have enabled the agency to increase both l e v e l s of s e r v i c e and s a l a r i e s 1 Levels of s e r v i c e decreased because gaming income has not been s u f f i c i e n t to replace money l o s t as a r e s u l t of government funding cuts 2 A d d i t i o n a l funds used to supplement core funding 1 A d d i t i o n a l funds used to reduce agency d e f i c i t 3 A d d i t i o n a l funds used f o r c a p i t a l expenditures 1 No change, amount of revenues generated was too s m a l l to make a d i f f e r e n c e 3 No response 4 n = 35 M u l t i p l e responses permitted 151 Although the r e s u l t s i n d i c a t e d that considerably more than half of the 3 5 agencies c u r r e n t l y i n v o l v e d i n gaming have become in v o l v e d since 1983 (wi t h s e v e r a l other agencies p l a n n i n g to become i n v o l v e d i n 1987), w i t h o u t the c o -operation of the B.C. Gaming C o n t r o l Branch i t was also not possible to determine, with any c e r t a i n t y , whether more s o c i a l welfare programs were being funded through gaming i n 1986 than was the case in 1982. For most of the agencies which have become i n v o l v e d i n the gaming industry, bingo and casino events have become a v i t a l source of income. Without such funds, many agencies would be fo r c e d to reduce or eliminate s e r v i c e s , l a y - o f f s t a f f , or even close. Other agencies are able to use the funds to reduce the agency d e f i c i t , purchase equipment, or o f f e r and evaluate new programs. Of p a r t i c u l a r i n t e r e s t was the f a c t t h a t almost a l l the agencies r e p o r t e d t h a t they had experienced an in c r e a s e d demand f o r s e r v i c e . L e v e l s of s e r v i c e had been incr e a s e d from between f i v e and 230 p e r c e n t . F o r o v e r h a l f the agencies, t h i s had occurred i n the face of reductions i n funding r e c e i v e d from e i t h e r government or pr i v a t e sources. In view of thi s i ncreased demand f o r s e r v i c e , i t is l i k e l y t h a t even i f revenues from bingo and casinos adequately c o u n t e r b a l a n c e d f u n d i n g r e d u c t i o n s , they may not have 152 counterbalanced increased operating costs and the costs of new s e r v i c e s . The s t a f f of the agencies have shouldered the r e s p o n s i b i l i t y f o r the f u n d - r a i s i n g . Although, i n some agencies, s t a f f hours in v o l v e d i n d i r e c t s e r v i c e have been reduced, or there has been an increase i n the workloads of s t a f f due to the involvement i n f u n d r a i s i n g , f o r the most part, there has not been a decline in staff morale. Such a development speaks to the high l e v e l s of commitment found among s t a f f i n the non-p r o f i t s o c i a l s e r v i c e sector. 153 Chapter VII IMPLICATIONS The abandonment of Keynesian economic t h e o r i e s i n favour of monetarism, a development which has been l e g i t i m i z e d by a neo-conservative ideology, has had far - r e a c h i n g e f f e c t s on most Western w e l f a r e s t a t e s . In B r i t i s h Columbia, these developments have a f f e c t e d the d r a f t i n g of s o c i a l p o l i c y and, consequently, the d e l i v e r y of s o c i a l welfare programs. I t may be t h a t , as a r e s u l t of changes which are o c c u r r i n g w i t h i n the broader economic system, and the r e s u r r e c t i o n of p r i v a t i z a t i o n and gaming as methods of r e d u c i n g budget d e f i c i t s , the s o c i a l s e r v i c e sector i n B r i t i s h Columbia i s a l s o undergoing a s i g n i f i c a n t transformation. As unemployment l e v e l s soared i n 1982-83, more people were f o r c e d to seek income a s s i s t a n c e . As a r e s u l t , a l a r g e r percentage of the p r o v i n c i a l M i n i s t r y of Human Resources' budget was given over to d i r e c t t r a n s f e r payments. In order to accommodate the increased demand f o r income a s s i s t a n c e , revenues were s h i f t e d away from the area s of w e l f a r e and education and the p r o v i s i o n of d i r e c t s e r v i c e s and programs (Government of B r i t i s h Columbia, 1980-82, 1985). In a d d i t i o n to reducing the l e v e l s of s e r v i c e i t had p r e v i o u s l y provided, the M i n i s t r y e i t h e r s e v e r e l y c u r t a i l e d , o r e l i m i n a t e d a l t o g e t h e r , f u n d i n g to many n o n - p r o f i t s o c i a l s e r v i c e o r g a n i z a t i o n s (B.C.G.E.U., 1985). I t c o u l d have been 154 p r e d i c t e d that t h i s combination of events would r e s u l t i n the n o n - p r o f i t s e c t o r f a c i n g i n c r e a s e d demands f o r s e r v i c e , c o u p l e d w i t h , i n many i n s t a n c e s , r e d u c t i o n s i n government funding. By w i t h d r a w i n g i t s f u n d i n g , the government appeared to be f o r c i n g n o n - p r o f i t agencies to seek a l t e r n a t i v e sources of funding i f they were to continue to operate. Indeed, neo-c o n s e r v a t i v e p o l i t i c i a n s suggested t h a t i f the e l i m i n a t e d s e r v i c e s were r e a l l y n e c e s s a r y , the community, f a m i l y or church would intervene to provide them. Such a suggestion does not, of c o u r s e , speak to the i s s u e of whether the supposed a l t e r n a t i v e s are a c t u a l l y a v a i l a b l e f o r these groups. The government was pursuing a course of a c t i o n that included both p r i v a t i z a t i o n and abandonment (Magnusson et a l , 1984). Although the number of agencies which were surveyed i n the course of the research f o r t h i s t h e s i s was not l a r g e , they were di v e r s e i n both s i z e and the s e r v i c e s which were being provided. This i s s i g n i f i c a n t i n that the trends they report are, perhaps, taking place across the spectrum of n o n - p r o f i t s o c i a l s e r v i c e o r g a n i z a t i o n s . Agency personnel reported that s i n c e 1983, t h e i r a g e n c i e s had e x p e r i e n c e d an i n c r e a s e d demand f o r s e r v i c e s . They c i t e d a v a r i e t y of f a c t o r s as b e i n g r e s p o n s i b l e f o r the i n c r e a s e d demand which, i n some 155 i n s t a n c e s r e f l e c t e d the n a t u r e of the c l i e n t group being s e r v e d : "the p o p u l a t i o n was ageing"; " s e n i o r s were l i v i n g l o n g e r " ; " h o s p i t a l s were d i s c h a r g i n g p a t i e n t s sooner"; " f a c i l i t i e s had longer w a i t i n g l i s t s " ; "increased awareness of r i g h t s " ; "more women working"; "better programs"; "public awareness of the agency"; "high unemployment"; " l a c k of p r o v i n c i a l government support"; "the economy"; and, "the i n a b i l i t y of the t r a d i t i o n a l s a f e t y net to meet human needs". In a d d i t i o n , not o n l y had t h e r e been an i n c r e a s e i n the demand f o r s e r v i c e s s i n c e 1983, agency p e r s o n n e l r e p o r t e d that they had been s u c c e s s f u l i n p r o v i d i n g increased l e v e l s of s e r v i c e . However, l e s s than o n e - t h i r d of the a g e n c i e s r e c e i v e d over 70 p e r c e n t of t h e i r f u n d i n g from any one source. Due to the l i m i t a t i o n s of the r e s e a r c h , i t i s not p o s s i b l e to draw f i r m conclusions; however, i t may be that r e d u c t i o n s i n government f u n d i n g have f o r c e d n o n - p r o f i t s o c i a l s e r v i c e a g e n c i e s to seek income from a v a r i e t y of sources, or to adopt what has been described as a 'shotgun' approach to securing funds (i.e. o b t a i n i n g s m a l l e r amounts of funding from a greater number of sources). While f u n d - r a i s i n g i s not new to most n o n - p r o f i t groups, i t i s , perhaps, t a k i n g on greater s i g n i f i c a n c e . In the face of decreasing budgets and increased demands f o r s e r v i c e , many agency personnel are becoming keenly i n t e r e s t e d i n e x p l o r i n g a l t e r n a t e ways of r a i s i n g the funds necessary to supplement 156 t h e i r agency budgets. Indeed, t h e r e are s i g n s t h a t an 'entrepreneurial' s p i r i t , born of n e c e s s i t y , may be pervading the s o c i a l s e r v i c e s e c t o r . For example, some agency p e r s o n n e l , who are assuming t h a t the economic system i s u n l i k e l y to change i n the near f u t u r e , are i n v e s t i g a t i n g the p o s s i b i l i t y of e s t a b l i s h i n g s m a l l businesses to provide the agency w i t h a d d i t i o n a l revenue. A community c o l l e g e i s c u r r e n t l y planning a s e r i e s of seminars designed to provide i n f o r m a t i o n regarding the o p p o r t u n i t i e s and p i t f a l l s i n v o lved i n n o n - p r o f i t o r g a n i z a t i o n s becoming more "entrepreneurial". I f , i n f a c t , a more p r e s s i n g need to r a i s e funds i s t a k i n g n o n - p r o f i t s o c i a l s e r v i c e agencies i n t o new, l e s s t r a d i t i o n a l areas, they w i l l be faced w i t h a host of ch a l l e n g i n g issues that w i l l r e q u i r e r e s o l u t i o n . These issues w i l l be analyzed f u r t h e r but, f i r s t , i t i s necessary to examine the area of ' e n t r e p r e n e u r i a l ' a c t i v i t y t h a t has been the focus of t h i s t h e s i s ; namely, gambling. Gaming and the Non-Profit Sector In the past, many spor t s , s e r v i c e , r e c r e a t i o n a l or r e l i g i o u s groups have conducted bingos, casinos or r a f f l e s i n order to r a i s e f u n d s . The A n n u a l R e p o r t s o f t h e P r o v i n c i a l S e c r e t a r y ' s O f f i c e r e f l e c t the f a c t t h a t , s i n c e 1979, the number of n o n - p r o f i t o r g a n i z a t i o n s that have a p p l i e d f o r , and been granted l i c e n c e s to conduct such events has increased 157 (Table 7:1). However, i n a d d i t i o n to t h i s o v e r a l l increase i n the number of n o n - p r o f i t agencies that use gaming events to r a i s e funds, the r e s u l t s of the research i n d i c a t e that the m a j o r i t y of those n o n - p r o f i t s o c i a l s e r v i c e a g e n c i e s t h a t p a r t i c i p a t e d have become involved since 1983. Some agency personnel i n d i c a t e d that the proceeds from e i t h e r bingo or c a s i n o s have been c r u c i a l to m a i n t a i n i n g c u r r e n t l e v e l s of s e r v i c e s , as w e l l as p r o v i d i n g other b e n e f i t s . For example, one Executive D i r e c t o r s t a t e d that "since our casino has been so e f f e c t i v e , the Board of D i r e c t o r s has been able to turn t h e i r a t t e n t i o n away from f u n d - r a i s i n g f o r a time and a c t i v e l y do some short and long term goal planning f o r the agency". However, without the on-going revenue from t h e i r bingo, t h i s agency "would be barely able to e x i s t " . Such a development has broad i m p l i c a t i o n s , from both a moral standpoint and i n view of the developments which are t a k i n g place w i t h i n the gaming industry. I t i s necessary to address the broader issues of the way i n which gambling i s perceived g e n e r a l l y , and whether developing the i n d u s t r y i s d e s i r a b l e , before moving on to consider the r a m i f i c a t i o n s of n o n - p r o f i t s o c i a l s e r v i c e o r g a n i z a t i o n s r e l y i n g on gaming proceeds i n order to provide s e r v i c e s . 158 TABLE 7:1 The Number of Licences Issued to Non-Profit Organizations F i s c a l Year Ended 1979 1982 1983 1984 T i c k e t L o t t e r i e s 1,394 1,495 1,696 1,802 Casino Licences 591 543 615 656 Bingo Licences 916 1,017 1,223 1,381 Concessionaire Licences 17 1 8 7 S o c i a l Clubs 32 37 28 39 A g r i c u l t u r a l F a i r s 5 18 19 27 T o t a l 2,955 3,111 $ M i l l i o n s 3,589 3,912 Estimated gross revenue by o r g a n i z a t i o n $9.18 35.0 75.2 94.0 Estimated c h a r i t a b l e donations by o r g a n i z a t i o n s 2.97 10.0 22.5 25.0 Licence fees c o l l e c t e d .31 .34 .41 .56 Source: M i n i s t r y of P r o v i n c i a l Secretary Annual Reports D e s p i t e the f a c t t h a t gambling has always been wi d e s p r e a d throughout s o c i e t i e s , f o r undetermined reasons, gambling has never been p e r c e i v e d as a t o t a l l y l e g i t i m a t e a c t i v i t y , e s p e c i a l l y f o r c e r t a i n groups of people. In a d d i t i o n , there have always been attempts to c o n t r o l and regulate gambling by imposing moral and l e g a l sanctions. However, i t appears that 159 g a m b l i n g among t h e 'upper c l a s s e s ' has n e v e r been as problematic as gambling among the 'lower classes'. Martinez (1983) p o i n t s out that i n ancient Egypt, the common people who gambled too much were put to work on the pyramids. Ashton (1898) c i t e s an E n g l i s h e d i c t , dated 1190, as evidence of the prevalence of gambling among a l l c l a s s e s at that time. The e d i c t pertained to the C h r i s t i a n army under the command of Richard the F i r s t of England and P h i l l i p of France, during the Crusade. I t p r o h i b i t e d "any person i n the army, beneath the degree of knight, from p l a y i n g at any s o r t of game f o r money" (Ashton, 1898; p. 13). What i s i n t e r e s t i n g about t h i s e d i c t i s t h a t , a l t h o u g h i t p r o h i b i t e d gambling among the lower ranks of the army, the two Monarchs and t h e i r entourage of knights r e t a i n e d the p r i v i l e g e of p l a y i n g whatever games of chance they pleased. Downes e t a l (1976; p. 34) argue t h a t the r e v i s i o n i n gambling laws, i n nineteenth century England, r e f l e c t e d "the concern over the 'example' set the poor by the p r o f l i g a c y of the r i c h ; and the p e r c e p t i o n , then t e n t a t i v e l y e x p r e s s e d , that the l a t t e r mattered l e s s , morally or s o c i a l l y , than the indulgences of the poor". Supposedly, t h i s concern over the m o r a l i t y o f the poor was an u n d e r l y i n g theme i n the fo r m u l a t i o n of gaming laws. 160 Some i n t e r e s t i n g hypotheses can be generated as to the p o s s i b l e reasons f o r the apparent double standards which have been a p p l i e d to the r i c h and the poor throughout h i s t o r y : ( i ) i n ancient times, gambling by the masses may have represented a s e c u l a r i z a t i o n of r e l i g i o u s p r a c t i c e s ; ( i i ) i t was not to the b e n e f i t of the a r i s t o c r a c y that 'common' people should spend t h e i r time gambling i n s t e a d of w o r k i n g ; and, ( i i i ) 'common' people should not expect to improve t h e i r economic p o s i t i o n through a c t i v i t i e s other than work. These double standards of m o r a l i t y have not been t o t a l l y e r a d i c a t e d w i t h the passage of time. The argument that u n l i m i t e d gambling o p p o r t u n i t i e s are u n d e s i r a b l e , forms one of the main j u s t i f i c a t i o n s f o r continued government c o n t r o l of the gaming in d u s t r y . However, the argument appears somewhat f a l l a c i o u s i n view of the government's r e c e n t move to i n s t a l l s l o t machines on c r u i s e s h i p s ; the p l a n s to i n s t a l l c a s i n o s on these same ships; and, the c o n s i d e r a t i o n being given to "the d e s i r a b i l i t y of p o l i c y f o r d e s t i n a t i o n r e s o r t and t o u r i s m o r i e n t a t e d gaming a c t i v i t i e s " (Vancouver Sun, A p r i l 2, 1987). I n a d d i t i o n t o i s s u e s r e g a r d i n g the d e s i r a b i l i t y o r u n d e s i r a b i l i t y of gambling g e n e r a l l y , agency personnel are f a c e d w i t h o t h e r concerns. As we have seen, both l o t t e r y t i c k e t s and bingo have been r a t e d as r e g r e s s i v e gambling games (casinos are l e s s so). The questions that were posed were, i f a s i g n i f i c a n t number of p u r c h a s e r s of l o t t e r y t i c k e t s or bingo players are persons on low incomes, and non-161 p r o f i t o r g a n i z a t i o n s are being forced to r e l y on funds from these sources as a r e s u l t of government funding cuts, what l o n g - t e r m e f f e c t s w i l l t h i s have on a g e n c i e s ? Are the disadvantaged paying f o r t h e i r own s o c i a l welfare programs? By encouraging i n d i v i d u a l s to spend what l i t t l e money they have on gambling, are n o n - p r o f i t agencies c o n t r i b u t i n g to the problems of c e r t a i n members of t h e i r c l i e n t groups? Obviously, there are no c l e a r - c u t answers to these questions. I f , as L i v e r n o i s (1986) s u g g e s t s , the government t a k e - o u t r a t e on l o t t e r y t i c k e t s was l o w e r and the revenues were d i s t r i b u t e d t o g e n e r a l revenues, they would be a l e s s r e g r e s s i v e form of t a x a t i o n . In a d d i t i o n , i t may w e l l be argued that the numbers of chronic poor w i l l not remain poor because they attend bingo s e v e r a l times a week. Rather, they are poor because of the c o n d i t i o n s p e r v a i l i n g i n the l a r g e r s o c i a l and economic s t r u c t u r e . Perhaps there i s substance to the argument th a t , l i k e the s i x t e e n t h century poverty r e l i e f schemes, the ' w e l f a r e s t a t e ' n e v e r had the c o m p l e t e e l i m i n a t i o n o f p o v e r t y as a g o a l . The p r o v i s i o n of o p p o r t u n i t i e s to gamble may not c o n t r i b u t e to the problems of c e r t a i n groups of people. For example, bingo p a r l o u r s may provide the s e t t i n g wherein i n d i v i d u a l s can s o c i a l i z e , and su p p o r t community o r g a n i z a t i o n s w h i l e they e n t e r t a i n the prospect of winning some 'extra' money. 162 The u n c e r t a i n t y surrounding these kinds of issues may have deterred some agencies from becoming i n v o l v e d w i t h gaming. Although the research d i d not involve an in-depth examination of t h i s p a r t i c u l a r aspect of the n o n - p r o f i t s o c i a l s e r v i c e sector's involvement i n gaming, the f a c t that some agencies had concerns came to l i g h t d u r i n g the i n i t i a l t e lephone survey. When agency p e r s o n n e l were asked whether the o r g a n i z a t i o n was in v o l v e d i n gaming, they responded to the question i n a number of ways: "the Board says no, i t s a moral issue"; "the Board has adopted a p o l i c y of no gambling, i t s a moral i s s u e " ; "the o r g a n i z a t i o n i s opposed to gambling"; " g a m b l i n g doesn't f i t w i t h p r o v i d i n g s e r v i c e s t o the community"; and, "we won't take money from the poor". Only 10 out of 41 agencies that were surveyed responded by i n d i c a t i n g t h a t t h e r e had been c o n t r o v e r s y among s t a f f regarding the moral issues around gambling, and the s p e c i f i c s of the i s s u e s were not d i s c l o s e d . In some i n s t a n c e s , a d i f f e r e n t i a t i o n was made between bingos and casinos; that i s , bingo was seen as a " s o c i a l event", w h i l e c a s i n o s were gambling. The r e c e n t changes i n both the p e r c e p t i o n s of bingo and the bingo i n d u s t r y g e n e r a l l y have been discussed. A l t h o u g h , a c c o r d i n g to the C r i m i n a l Code, both bingo and casino events are considered gambling, the long involvement i n bingo by the C a t h o l i c Church has, perhaps, caused t h i s a c t i v i t y to be viewed as the more benign and ' l e g i t i m a t e ' of the two. 163 Conducting bingos and casino events can be very l u c r a t i v e and the money very a p p e a l i n g . While members of Boards of D i r e c t o r s may i n i t i a l l y be r e l u c t a n t to become inv o l v e d i n gaming events, they may be won over by the f i n a n c i a l returns. A l t h o u g h gambling g e n e r a l l y , and, i n p a r t i c u l a r , the non-p r o f i t s o c i a l s e r v i c e sector involvement i n the a c t i v i t y , may present no moral or other issues f o r many i n d i v i d u a l s , others may choose not to d e a l w i t h any of the q u e s t i o n s s i m p l y because they perceive no other v i a b l e methods of r a i s i n g the needed revenues. One respondent commented that "we cannot a f f o r d to worry about the morals of gambling, i t brings us needed funds w i t h the l e a s t p o s s i b l e expenditure of time and e f f o r t " . Since people always have and always w i l l gamble, any attempts to deter the a c t i v i t y a l t o g e t h e r may prove as unsuccessful as P r o h i b i t i o n . Because people enjoy gambling games l i k e l o t t e r i e s , they have long been a popular way f o r n o n - p r o f i t groups and r e l i g i o u s o r g a n i z a t i o n s , as w e l l as the s t a t e , to r a i s e funds. Therefore, an argument could be made that there are no reasons, other than those of a moral nature, why non-p r o f i t s o c i a l s e r v i c e o r g a n i z a t i o n s should not provide the o p p o r t u n i t i e s f o r people to gamble. However, the issue of whether or not n o n - p r o f i t s o c i a l s e r v i c e a g e n c i e s s h o u l d become in v o l v e d i n the gaming i n d u s t r y i s complicated by the 164 f a c t t h a t t h e government has moved t o s h i f t t h e r e s p o n s i b i l i t y f o r many s o c i a l s e r v i c e s onto the n o n - p r o f i t and p r i v a t e s e c t o r . I t would appear t h a t some n o n - p r o f i t agency personnel f e e l that they have no choice as to whether or not to be involved i n gaming i f they wish to continue to provide s e r v i c e s to the groups f o r which the government w i l l no longer accept r e s p o n s i b i l i t y . I t i s , perhaps, the wedding of ' p r i v a t i z a t i o n ' and gaming that represents the paramount moral issue. At the same time t h a t i n c r e a s e d numbers of n o n - p r o f i t o r g a n i z a t i o n s (both w i t h i n and o u t s i d e the s o c i a l s e r v i c e sector) have become inv o l v e d i n gaming i n order to support t h e i r various a c t i v i t i e s , the government's p o s i t i o n regarding the d i r e c t i o n of gaming i n B r i t i s h Columbia has been ambiguous and i t s a c t i o n s c o n t r a d i c t o r y . While l o t t e r y t i c k e t s a l e s are promoted on the ba s i s that the funds support community o r g a n i z a t i o n s and programs, l a r g e sums remain u n d i s t r i b u t e d a t the end of each year. However, over $13 m i l l i o n was removed from the Lo t t e r y Fund and "le n t " to the B.C. L o t t e r y Corporation f o r s t a r t - u p expenses. The amount was s t i l l outstanding as of March 31, 1986 ( B r i t i s h Columbia L o t t e r y Corporation Annual Report, 1986). E a r l i e r t h i s year, when i t was proposed that s l o t machines be i n s t a l l e d on government-owned c r u i s e s h i p s , the P r e m i e r promised that the money would be disbursed to c h a r i t i e s . In 165 May, 1987, he s a i d "he was wrong when he p r omised ... t h a t (the) p r o f i t s ... would go to c h a r i t i e s " (Vancouver Sun, May 13, 1987). A c c o r d i n g t o the A t t o r n e y G e n e r a l , " f o r the moment, the p r o f i t s w i l l be put toward the corporation's debt and the $400,000 renovation cost f o r b u i l d i n g mini-casinos on board" (Vancouver Sun, May 13, 1987). The statements made by these s e n i o r Cabinet m i n i s t e r s suggest t h a t w h i l e the government i s r e d u c i n g s e r v i c e s and e l i m i n a t i n g grants to the n o n - p r o f i t s o c i a l s e r v i c e s e c t o r w i t h one hand, i t i s busy s h i f t i n g gaming revenues away from the n o n - p r o f i t s e c t o r and i n t o g e n e r a l revenues, w i t h the o t h e r . The s h i f t i n g of l o t t e r y funds away from the non-p r o f i t s e c t o r and i n t o general revenues may not, i n i t s e l f , be problematic. For example, L i v e r n o i s (1986) argues that when l o t t e r y funds are not t r a n s f e r r e d i n t o general revenues, but are used to support designated r e c r e a t i o n a l or c u l t u r a l a c t i v i t i e s and programs, "the expenditure of l o t t e r y p r o f i t s i s s l i g h t l y p r o g r e s s i v e i n t h a t i t b e n e f i t s h i g h income groups p r o p o r t i o n a t e l y more than low income groups" (p. 10). However, what i s p r o b l e m a t i c i s the d u p l i c i t y t h a t i s apparent i n r e c e n t government announcements and a c t i o n s regarding the gaming i n d u s t r y . Over the past f i v e years, s u b s t a n t i a l changes have a f f e c t e d both the bingo and casino components of the gaming in d u s t r y 166 and the n a t u r e of the developments were o u t l i n e d i n an e a r l i e r c h a p t e r . The impact of these developments i s r e f l e c t e d i n the e s t i m a t e d g r o s s revenue and c h a r i t a b l e donation f i g u r e s of the n o n - p r o f i t o r g a n i z a t i o n s involved i n bingos and casinos (Table 7:1). For example, at the end of f i s c a l 1982-83, o r g a n i z a t i o n s r a i s e d $75.2 m i l l i o n and, a f t e r meeting expenses, the groups were l e f t w i t h $22.5 m i l l i o n f o r t h e i r c h a r i t i e s . However, i n f i s c a l 1983-84, and i n s p i t e of gross revenues of $94 m i l l i o n , the o r g a n i z a t i o n s were l e f t w i t h only $25 m i l l i o n a f t e r expenses. The minimal increase i n net revenues, despite an almost $20 m i l l i o n increase i n gross revenues, r e f l e c t s the f a c t that groups paid out l a r g e r prizeboards as the bingo i n d u s t r y became more competitive. The government i s able to c o n t r o l and c u r t a i l the a c t i v i t i e s of the n o n - p r o f i t sector and, th e r e f o r e , the revenues which flow to those groups. P r e v i o u s l y the government was able to c o n t r o l the a c t i v i t i e s of the n o n - p r o f i t s e c t o r through d i s p e n s i n g o r w i t h h o l d i n g g r a n t s o r c o n t r a c t s . By encroaching i n t o an area p r e v i o u s l y dominated by n o n - p r o f i t s w h i l e , at the same time, c u r t a i l i n g t h e i r a c t i v i t i e s through r e g u l a t i o n , the government i s e n s u r i n g t h a t a g e n c i e s w i l l always be dependent on the government, as e i t h e r a d i r e c t or i n d i r e c t source of funds. In the past, the government has been a b l e to c o n t r o l the types of s e r v i c e p r o v i d e d by the n o n - p r o f i t s e c t o r by r e f u s i n g to fund programs which were l e s s ' p o l i t i c a l l y ' a t t r a c t i v e . I t i s c o n c e i v a b l e t h a t , i n 167 f u t u r e , gaming l i c e n c e s may o n l y be g r a n t e d to those c h a r i t a b l e o r g a n i z a t i o n s which are deemed to be p r o v i d i n g ' w o r t h w h i l e ' o r ' n e c e s s a r y ' s e r v i c e s . N o n - p r o f i t o r g a n i z a t i o n s may always be forced to sway i n the p o l i t i c a l winds. The f i n a l point i s perhaps the most s t a r t l i n g . As Table 7:1 i n d i c a t e s , each year government revenues from gaming are i n c r e a s i n g . I t i s e x pected t h a t government revenues w i l l i n c r e a s e t o an even g r e a t e r degree as a r e s u l t o f , i n p a r t i c u l a r , the increased cost of bingo and casino l i c e n c e s to n o n - p r o f i t o r g a n i z a t i o n s ; the government monopoly on bingo paper; the i n t r o d u c t i o n of s l o t machines; and, e v e n t u a l l y casinos. I n s o f a r as n o n - p r o f i t agencies w i l l continue to r emain i n v o l v e d i n gaming i n o r d e r to r a i s e the money ne c e s s a r y to p r o v i d e the s o c i a l s e r v i c e s f o r which the government w i l l no longer accept r e s p o n s i b i l i t y , these non-p r o f i t o r g a n i z a t i o n s w i l l c o n t i n u e to p r o v i d e i n c r e a s i n g r e v e n u e f o r t h e government. One c o u l d say t h a t the government gets "two b i t e s of the c h e r r y " . By r e d u c i n g d i r e c t s e r v i c e s , as w e l l as r e d u c i n g f u n d i n g to the non-p r o f i t sector, the government has c u r t a i l e d i t s expenditures. When n o n - p r o f i t o r g a n i z a t i o n s turn to gaming, they become a source of revenue, while simultaneously p r o v i d i n g the v i t a l s o c i a l s e r v i c e s which the government has abandoned. 168 As an i n c r e a s i n g number of n o n - p r o f i t o r g a n i z a t i o n s have sought a l t e r n a t i v e s o u rces of revenue as a r e s u l t of r e d u c t i o n s i n government f u n d i n g , t h e i r r e q u i r e m e n t s have been met, to a s i g n i f i c a n t degree, by revenues gen e r a t e d through gambling. I t would appear that i n view of the neo-c o n s e r v a t i v e a p p r o a c h b e i n g t a k e n w i t h r e g a r d t o p r i v a t i z a t i o n (i.e., the s h i f t i n g of r e s p o n s i b i l i t y f o r many s o c i a l s e r v i c e s onto the n o n - p r o f i t s e c t o r ) , the government s h o u l d be making every e f f o r t to ensure t h a t a l l gaming revenues are disbursed to n o n - p r o f i t s o c i a l s e r v i c e or other c h a r i t a b l e groups. C l e a r l y , i t i s n e g l e c t i n g to do so. The Challenge of the 'New R e a l i t y ' In a d d i t i o n to the var i o u s problems o u t l i n e d above, there are some more g e n e r a l concerns a s s o c i a t e d w i t h n o n - p r o f i t o r g a n i z a t i o n s r a i s i n g f u n d s t h r o u g h e n t r e p r e n e u r i a l a c t i v i t i e s . For example, i f a " n o n - p r o f i t " o r g a n i z a t i o n e s t a b l i s h e s a s m a l l business i n order to generate funds, can the agency s u s t a i n i t s h u m a n i t a r i a n v a l u e s i n the face of hav i n g to make d e c i s i o n s based on the need to m a i n t a i n p r o f i t a b i l i t y ? I f the e n t e r p r i s e i s p r o f i t a b l e , s h o u l d wages be higher than minimum wage, e s p e c i a l l y i n the event t h a t r a i s i n g s a l a r i e s reduces the p r o f i t margin? I f the e n t e r p r i s e were to become h i g h l y p r o f i t a b l e , would the agency be e x p l o i t i n g i t s employees i f o n l y the minimum wage was paid? Is paying minimum wage j u s t i f i a b l e on the b a s i s that the agency i s both using p r o f i t s to provide s o c i a l s e r v i c e s 169 and c r e a t i n g jobs? At t h i s p o i n t , these perplexing questions remain unanswered. However, t h e r e are v a r i o u s p o s i t i v e a s p e c t s to a non-p r o f i t o r g a n i z a t i o n becoming i n v o l v e d i n operating a business e n t e r p r i s e . For example, any business may be developed on the b a s i s of p r o f i t - s h a r i n g by the agency and employees. In a d d i t i o n , as n o n - p r o f i t o r g a n i z a t i o n s become l e s s dependent upon government funding (and, l e s s s u s c e p t i b l e to government c o n t r o l s ) , they w i l l be a b l e to adopt a s t r o n g e r advocacy r o l e on behalf of t h e i r c l i e n t group. As n o n - p r o f i t s o c i a l s e r v i c e agencies move i n t o the business s e c t o r , t h e i r e f f o r t s w i l l be f o r t i f i e d by the a b i l i t y to be c r e a t i v e i n t h e i r approach to both b u s i n e s s and the d e l i v e r y of s o c i a l s e r v i c e s . At the same t i m e , w h i l e some s o c i a l s e r v i c e workers may accept what perhaps may be thought of as a "challenge", and seek out n o n - t r a d i t i o n a l ways of r a i s i n g funds, others may f e e l that such a development w i l l compromise the i d e a l s and values of the agency. In such an instance, i t i s p o s s i b l e to p r e d i c t a c l a s h of i d e o l o g i e s - between those i n d i v i d u a l s who accept the challenge created by the s o - c a l l e d 'New R e a l i t y ' , and those who do not. In summary, i t i s c l e a r that the adoption of a stra t e g y of 170 p r i v a t i z a t i o n - one of the t a c t i c s f l o w i n g from the adoption of m o n e t a r i s t economic p o l i c i e s - has i n v o l v e d more than simply the t r a n s f e r of r e s p o n s i b i l i t y f o r the production of s o c i a l s e r v i c e s from the p u b l i c to the p r i v a t e realm w i t h the g o vernment c o n t i n u i n g t o p r o v i d e f i n a n c i a l s u p p o r t . P r i v a t i z a t i o n has i n v o l v e d a measure of "abandonment" s i n c e , f o r many n o n - p r o f i t s o c i a l s e r v i c e a g e n c i e s , f u n d i n g has e i t h e r been reduced i n r e a l terms or withdrawn altogether. Rather than d i s c o n t i n u i n g t h e i r a c t i v i t i e s , many n o n - p r o f i t o r g a n i z a t i o n s have c h o s e n t o s e c u r e f u n d i n g t h r o u g h conducting gambling a c t i v i t i e s . T h i s development r a i s e s a number of i m p o r t a n t i s s u e s and i m p l i c a t i o n s . For example, can p r i v a t e agencies, which have t r a d i t i o n a l l y r e l i e d on government f i n a n c i a l support, adapt to a new " e n t r e p r e n e u r i a l " environment? I f they do, how w i l l they resolve the moral c o n f l i c t embedded i n the c l a s h between the b u s i n e s s o b j e c t i v e of p r o f i t a b i l i t y and the s o c i a l s e r v i c e o b j e c t i v e o f a n s w e r i n g unmet needs? More im p o r t a n t l y , can p r i v a t e n o n - p r o f i t o r g a n i z a t i o n s r e s o l v e the moral and p r a c t i c a l dilemmas a s s o c i a t e d w i t h gambling? I f they do so, to what extent are they u n w i t t i n g l y d i s c h a r g i n g the government's r e s p o n s i b i l i t y to provide s e r v i c e s to those i n need w h i l e , i r o n i c a l l y , a c t i n g as the gatherers of revenue which i s c h a n n e l l e d i n t o the c o f f e r s of a government t h a t r e f u s e s t o use t h e money to meet the needs o f the d i s a d v a n t a g e d ? These k i n d s of q u e s t i o n s deserve f u r t h e r 171 c o n s i d e r a t i o n and research, p a r t i c u l a r l y i f the experience of n o n - p r o f i t o r g a n i z a t i o n s i n B r i t i s h Columbia i s but a r e f l e c t i o n of the s i t u a t i o n i n other provinces. 172 BIBLIOGRAPHY Allen, R.C. and Rosenbluth, G. (Eds.), (1986). Restraining the Economy: Social Credit Economic Policies  f o r B r i t i s h Columbia i n the E i g h t i e s . Vancouver: New Star Books Anston, D., Schaefer, D., Schless, P., Schottland, C. and Woodson, R.L. (1982). 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Vancouver Sun, The. Fired. Februry 6 1985. Chief of B.C. Lottery Branch Vancouver Sun, The. Paperwork. March 8 1985. Charities Lose Tax Breaks in Vancouver Sun, The. 1985. Lawyer. March 22 L o t t e r y Ads Lured Accused: Vancouver Sun, The. 1985. Lottery Fever Reaching Epidemic L e v e l i n B.C. A p r i l 15 Vancouver Sun, The. 1985. B.C. Has to Pay to Go Its Own Way. April 15 Vancouver Sun, The. 1985. Lottery Disease Attacks Well-Being of Province. April 2 6 Vancouver Sun, The. 1985. for Bingo Laws. April 27 0 for Overhaul Eyed by Chabot Vancouver Sun, The. 1985. I l l e g a l i t i e s . A p r i l 3 0 Chabot Seeks Proof of Bingo Vancouver Sun, The. 1985. Would You Gamble in Cariboo? May 17 184 Vancouver Sun, The. 1985. Another Way to Prey on the Poor. May 9 Vancouver Sun, The. 1985. Gambling Goldrush. May 17 Vancouver Sun, The. 198 5. Bingo Law breaking Allegations Submitted. May 17 Vancouver Sun, The. 1985. Welfare Week Spins Biggest Bingo P r o f i t s . August 3 Vancouver Sun, The. 1985. L i t t l e Charities Feeling the Pinch as Huge Halls Draw The Players. August 3 Vancouver Sun, The. 1985. 32 Bingo Charities Suspended in B.C. Gaming Rules Violations. September 24 Vancouver Sun, The. 1985. Bingo Operators Angry at Penalty. September 28 Vancouver Sun, The. 1985. The Recovery D i e t : Booze and Bingo. November 5 Vancouver Sun, The. 1985. New Rules for Bingo Drawn Up. November 9 Vancouver Sun, The. 1985. Chamber of Commerce Urges Resort Casinos. December 12 Vancouver Sun, The. 1985. Casino Idea is Hypocritical Lunacy. December 13 Vancouver Sun, The. 1985. Senators Fear Gambling B i l l to Open Door. December 12 Vancouver Sun, The. 1986. We've Become a Nation of Sore Losers. January 13 Vancouver Sun, The. 1986. Gambling Watch Claimed. A p r i l 15 185 Vancouver Sun, The. 198 6. Charities Fear Loss of Gambling Funds. May 3 Vancouver Sun, The. 1986. McCarthy Throws Wrench into B.C.'s Wheels of Fortune. May 31 Vancouver Sun, The. 1986. McCarthy Simply Tells Gamblers: Obey the Law, June 7 Vancouver Sun, The. 1986. New Bingo Rules a Bust, Worried Operators Say. June 12 Vancouver Sun, The. 1986. New B.C. Casino Rules to Stay. June 13 Vancouver Sun, The. 1986. Bettors Abandon Casinos. J u l y 2 5 Vancouver Sun, The. 1986. Gambling Casinos Planned on B.C. Ferry Run to Seattle. September 18 Vancouver Sun, The. 1986. Lights Turned Out on Bingo Booster. August 9 Vancouver Sun, The. 1986. Expo De f i c i t on Target, Premier Suggests. September 5 Vancouver Sun, The. 1986. Ferry Gambling Plan a Hit With Casino Firm. September 19 Vancouver Sun, The. 1986. B.C.'s Ship Casino Plans Face Tough Odds in U.S. September 29 Vancouver Sun, The. 1986. Gambling a Bad Deal, Harcourt Says. October 9 Vancouver Sun, The. 1986. An Open Door for the Mob. October 10 Vancouver, Sun, The. 1986. New Lotteries Work Like Slot Machine. October 30 186 Vancouver Sun, The. 198 6. Under the B(Branch), Charity: Legion Gives $614,000 to aid Others. December 18 Vancouver Sun, The. 1986. Charities Claim Gambling Rules Dealt Them Out. October 15 Vancouver Sun, The 1986. Bingo, Car Washes Help Give Extra Cash to Schools. October Vancouver Sun, The. 1987. Review Casino Rules, Planner Urges City. January 14 Vancouver Sun, The. 1987. Cleric Attacks Ferry Gambling Plan. January 17 Vancouver Sun, The. 1987. Premier Says No Dice to B.C. Ferry Casinos. January 23 Vancouver Sun, The. 1987. Policy on Gambling Clarified. February 4 Vancouver Sun, The. 1987. Gambling, Labour Restraints on B.C. Business 'Wish L i s t ' . February 19 Vancouver Sun, The. 1987. New Gaming Chief Wants Public Input. March 13 Vancouver Sun, The. 1987. Casino Operator Gambling Gaming Laws Will' Be Eased. March 18 Vancouver Sun, The. 1987. Well-Mannered Crowd Attends Opening Night of F i r s t Vancouver Casino. March 23 Vancouver Sun, The. 1987. Hold Your Bets, Let's Debate It. March 26 Vancouver Sun, The. 1987. Charity Casinos Get More Money Under New Rules. Apr i l 2 187 Vancouver Sun, The. 198 7. Strapped Charities Pleased B e t t i n g L i m i t Rising to $5. A p r i l 3 Vancouver Sun, The. 1987. C h a r i t i e s Seek Casino Cash May 6 Vancouver Sun, The. 1987. Casinos on the High Seas May 6 Warren, C.B. (1981). New Forms of S o c i a l C o n t r o l . American  Behavioural S c i e n t i s t , 24(6), 724-740 Weddell, K. (1986). P r i v a t i z i n g S o c i a l S e r v i c e s i n the U.S.A. S o c i a l P o l i c y and Ad m i n i s t r a t i o n , 2_0(1), 14-27 Weinstein, D. and Deitch, L. (1974). The Impact of L e g a l i z e d Gam b l i n g : The Socioecono mic Consequences of L o t t e r i e s and O f f - T r a c k B e t t i n g. New Y o r k : P r a e g e r P u b l i s h e r s Wineburg, R.J. (1984). Pulling Together or Tearing Apart: Birds of a Feather Must Choose. Public Welfare, 42(3), 26-30 Wineman, S. (1984). The Politics of Human Services: Radical Alternatives to the W elf are State. Montreal: Black Rose Books Wolfe, D.A. (1984). The Rise and Demise of the Keynesian Era in Canada: Economic Policy, 1930-1982, in Cross, M.C. and Kealey, G.S. (Eds.), Modern Canada: 1930-1980. Toronto: McClelland and Steward 188 APPENDIX 1 189 APPENDIX 2 191 IF YOU WISH TO COMPLETE THIS QUESTIONNAIRE ANONYMOUSLY, YOU MAY LEAVE THIS SECTION BLANK. Name of Non-Profit Agency: May I contact you i f I r e q u i r e any a d d i t i o n a l i n f o r m a t i o n : Yes No (I f yes), name of Contact Person: In what year d i d your agency begin operating? Is the agency a branch of a n a t i o n a l o r g a n i z a t i o n ? a branch of a p r o v i n c i a l o r g a n i z a t i o n ? an autonomous agency? B r i e f l y s p e c i f y the kinds of programs/services that are o f f e r e d and the group to whom they are t a r g e t t e d : Program Target group T o t a l Number of Programs What was the t o t a l number of i n d i v i d u a l s served by a l l the agency programs during your l a s t accounting year? How many f u l l - t i m e s t a f f , both c l e r i c a l and p r o f e s s i o n a l , are employed by the or g a n i z a t i o n ? How many part-time s t a f f , both c l e r i c a l and p r o f e s s i o n a l , are employed by the o r g a n i z a t i o n ? How many volunteers are used on a r e g u l a r b a s i s ? 192 What was the t o t a l annual budget f o r a l l programs o f f e r e d by the agency during the f i s c a l year 1985/86 (or the calendar year 1986?) Please provide a breakdown of the above f i g u r e by source (a best estimate w i l l be s u f f i c i e n t ) : P r o v i n c i a l government purchase of s e r v i c e c o n t r a c t s i P r o v i n c i a l government annual core funding grants Federal government purchase of s e r v i c e c o n t r a c t s Federal government annual core funding grants M u n i c i p a l grants Grants from p h i l a n t h r o p i c t r u s t s C l i e n t fees Casino l i c e n s e s Bingo l i c e n s e L o t t e r y Fund Senior L o t t e r i e s A s s o c i a t i o n R a f f l e s Donations from p r i v a t e i n d i v i d u a l s Donations from p r i v a t e businesses Donations from other n o n - p r o f i t groups. Please l i s t the agency. Donations from s e r v i c e o r g a n i z a t i o n s (e.g. The Lions Clubs, Kinsmen, Rotary). Please l i s t the s e r v i c e o r g a n i z a t i o n . Other (please s p e c i f y ) TOTAL 193 Since 1983, has your agency experienced a reduction i n funding from any of the sources mentioned above? Source % Reduction Since 1983, has your agency experienced an increased demand f o r s e r v i c e ? Estimated % increase i n demand i n 1984 (over 1983) Estimated % increase i n demand i n 1985 (over 1984) Estimated % increase i n demand i n 1986 (over 1985) In your judgement, has the agency s i g n i f i c a n t l y increased i t s l e v e l s of s e r v i c e s since 1983? Target group %^  Increase In your o p i n i o n , what i s the major reason(s) f o r t h i s increase? In your judgement, has the agency s i g n i f i c a n t l y decreased i t s l e v e l s of s e r v i c e s s i n c e 1983? Target group %^  Decrease 194 In your o p i n i o n , what i s the major reason(s) f o r t h i s decrease? When d i d s t a f f , members of the agency, or o t h e r s begin r a i s i n g money through -Year Holding casino events Holding bingo games Conducting r a f f l e s or l o t t e r i e s S e l l i n g L o t t e r y T i c k e t s Please i n d i c a t e what prompted the i n d i v i d u a l s i n v o l v e d to begin r a i s i n g money through hosting bingo or casino act i v i t i e s : The agency could not ob t a i n funding from any other source The agency l o s t part or a l l of i t s p r o v i n c i a l funding _ The agency l o s t part or a l l of i t s f e d e r a l funding _ The agency l o s t part or a l l of i t s p r i v a t e funding The agency r e t a i n e d i t s l e v e l s of government funding but wished to augment a v a i l a b l e funds _ The agency recognized a s p e c i f i c need and designed a new program, but was refused government funding f o r the new s e r v i c e Other/Remarks 195 Who i s i n v o l v e d i n the agency's fund r a i s i n g e f f o r t s : S t a f f _ Members of the agency C l i e n t s Volunteers P r o f e s s i o n a l fund r a i s e r s How d i d you, the s t a f f , or others i n v o l v e d w i t h your agency, become aware of the opportunity to r a i s e funds through gambling or l o t t e r y a c t i v i t i e s ? I f you began to r a i s e money through holding gambling events because of reductions i n funding, please answer the next question; i f not, please leave blank and continue. Have any funding reductions been adequately counterbalanced by revenues gained by conducting gambling a c t i v i t i e s : Yes No Comments: 196 What e f f e c t , i f any, has the holding of gambling events had on the s t a f f of the agency? S t a f f hours involved i n d i r e c t s e r v i c e are reduced because of s t a f f involvement i n fund r a i s i n g A d e c l i n e i n s t a f f morale An improvement i n s t a f f morale Controversy among s t a f f regarding moral issues Increased workloads f o r s t a f f due to t h e i r involvement i n fund r a i s i n g Increases i n funding allowed agency to h i r e more s t a f f Other, please explain/comments: What e f f e c t would l o s i n g the revenues from gaming have on the agency? What e f f e c t , i f any, has hosting gambling events had on the l e v e l or types of s e r v i c e s which the agency o f f e r s ? Increased revenues have allowed s t a f f to develop new programs Increased revenues have allowed s t a f f to mount short-term in n o v a t i v e programs i n order to a s c e r t a i n t h e i r e f f e c t i v e n e s s The l e v e l s of s e r v i c e have not changed because the a d d i t i o n a l income replaced other funding cuts The l e v e l s of s e r v i c e have decreased because the income generated through gambling events has not been s u f f i c i e n t to replace money l o s t through government funding cuts Other, please s p e c i f y : 197 Does your agency donate any of the proceeds that are r a i s e d through gaming to other n o n - p r o f i t agencies? I f so, would you please l i s t them. Can you l i s t any other agencies t h a t , to your knowledge, have turned to a l t e r n a t i v e sources of funding a f t e r experiencing cut backs i n funding from p r o v i n c i a l or f e d e r a l government sources? Agency A l t e r n a t i v e Source of Funds (e.g. hostinggambling a c t i v i t i e s , other f u n d - r a i s i n g a c t i v i t i e s , more emphasis put on p r i v a t e donations, implementing a fee s t r u c t u r e ) Can you l i s t any other agencies t h a t , to your knowledge, have been forced to c l o s e a f t e r experiencing cut backs i n funding from p r o v i n c i a l or f e d e r a l government sources? Agency Approximate Date of Closure 198 THANK YOU FOR TAKING THE TIME TO COMPLETE THE QUESTIONNAIRE. IF THERE ARE ANY ADDITIONAL COMMENTS YOU FEEL YOU WOULD LIKE TO MAKE, PLEASE FEEL FREE TO DO SO. 199 

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